Jeff Bezos, the mastermind behind Amazon.com Inc.’s (AMZN) “everything store,” told employees last week that the company will one day fail, according to an internal meeting heard by CNBC.
Lifespan of Large Companies About 30+ Years, Says Bezos
At an all-hands meeting last Thursday in Seattle, an employee asked Bezos what lessons he had learned from the recent bankruptcies of Sears and other retailers.
“Amazon is not too big to fail… In fact, I predict one day Amazon will fail. Amazon will go bankrupt. If you look at large companies, their lifespans tend to be 30-plus years, not a hundred-plus years,” said the world’s richest man.
The 54-year-old CEO acknowledged that his 24-year-old company is far from invincible, and therefore the main task of employees is to delay its inevitable demise as long as possible. His plan is to double down on listening to consumers, “obsess” over them and respond accordingly.
“If we start to focus on ourselves, instead of focusing on our customers, that will be the beginning of the end,” said Bezos. “We have to try and delay that day for as long as possible.”
Bezos made light of the discussion, adding that most of the companies that have survived for over a century are breweries. “It’s very interesting — I’m not sure what that says about society.”
‘Reasonable’ for Any large Institution to Be Scrutinized
Amazon is among America’s leading technology behemoths who have investor fears of heightened regulatory pressure in 2018, with FAANG peers such as Facebook Inc. (FB) combating a series of high-profile data scandals. As a result of negative media, coupled with broader market volatility, concerns over rising rates, trade tensions, and geopolitical instability, Amazon has seen its stock fall into bear market territory alongside its tech peers, marking the end of tech’s dominance that characterized the nearly decade-running bull market.
“It’s a fact that we’re a large company,” said Bezos. “It’s reasonable for large institutions of any kind, whether it be companies or governments, to be scrutinized.”
This week, Amazon picked its two locations for its second headquarters outside of Seattle, in New York and Northern Virginia. The HQ2 initiative is expected to bring in another 50,000 employees, adding to its more than 600,000-person strong workforce that has grown by over 20-fold in just eight years.
Closing up 1.3% on Thursday at $1,619.44, with a market cap of $791 billion, Amazon stock reflects a 21% decline from its 52 week high. Shares still reflect a solid 38.5% increase YTD, outperforming the S&P 500’s 2.1% return and the Nasdaq Composite Index’s 5.2% increase over the same period.
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