The leader of Amazon's cloud-services division, Amazon Web Services, will step down early next month, the tech giant announced Tuesday. Amazon stock traded sideways, closing with a slight gain.
Amazon said that AWS Chief Executive Adam Selipsky will be replaced by Matt Garman, AWS' current sales and marketing leader. Selipsky took leadership of AWS three years ago. Selipsky's last day in the role will be June 3.
"Adam leaves AWS in a strong position, having reached a $100 billion annual revenue run rate this past quarter, with (year-over-year) revenue accelerating again," Amazon Chief Executive Andy Jassy wrote in a memo to employees Tuesday that Amazon also published online.
On the stock market today, Amazon stock gained a fraction to close at 187.07.
Amazon Stock: AWS Competing With Microsoft
AWS, which rents cloud-based computing power and other services to businesses, is a key profit driver for Amazon. In 2023, AWS was responsible for two-thirds of Amazon's $37 billion in operating income, while contributing 16% of the company's total revenue.
Selipsky has spent 14 years at AWS in two separate stints. In between, he was chief executive of Tableau Software at Salesforce from 2016 to 2021. Selipsky returned to AWS in 2021, assuming the leadership role vacated after Jassy was appointed Amazon's chief executive.
Amazon is by far the largest provider of cloud services. But it has been challenged in recent quarters by Microsoft, which analysts say was quicker to embrace generative artificial intelligence. Also, AWS' year-over-year sales growth slowed in 2022 and 2023 as companies cut back on tech spending. AWS undertook significant layoffs last year.
Still, AWS is coming off a strong first quarter, with sales growth accelerating. Jassy highlighted the division's momentum with AI.
"Given the state of the business and the leadership team, now is an appropriate moment for me to make this transition, and to take the opportunity to spend more time with family for a while, recharge a bit, and create some mental free space to reflect and consider the possibilities," Selipsky wrote in the same employee memo.
Who Is Matt Garman, New AWS Leader?
Garman started as an intern during the summer of 2005 and was among the earliest product managers for AWS.
"Matt knows our customers and business as well as anybody in the world, and has senior leadership experience on both the product and demand generation sides," Jassy wrote Tuesday. "I'm excited to see Matt and his outstanding AWS leadership team continue to invent our future — it's still such early days in AWS."
Amazon stock has gained 23% so far this year, outpacing a 9.5% gain for the S&P 500.
