Report: Bezos says Amazon is not too big to fail, and will one day
Nov 16, 2018, 11:11 AM | Updated: 12:09 pm
Amazon's emerging headquarters in Seattle. (AP)
(AP)
Amazon is not too big to fail and could go bankrupt, eventually, according to the online retail giant’s founder and CEO Jeff Bezos.
“He points out that nothing lasts forever, even the Roman Empire lasted 500 years or so,” Tom Tangney said, with KIRO Radio’s Tom and Curley Show.
CNBC reports that Bezos responded to an employee question in Seattle last Thursday — ahead of the HQ2 announcement — with a frank response. In short, with expansion plans in Seattle and elsewhere, pay hikes and other developments, Amazonians were wondering what the future of the company looked like.
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.
Since Bezos started Amazon in 1994, that starts Bezos’ “lifespan” estimate at around 2024.
Indeed, other influential American companies have risen and fallen around that 30-100 year time span. Sears was started in the 1890s. By the 1990s, it was facing bankruptcy and later mergered with Kmart. Sears then shrank from 3,500 stores in 2010 to 695 stores in 2017, and filed for bankruptcy in 2018. Another large store, JC Penney, faced a similar timeline, starting in 1902 and began struggling in 2010.
Or consider Seattle’s Bon Marche, which was founded in 1890. It faded after the millennium.
“He figures that sometime in the next century, Amazon will go belly up and his job is to stave off that day for as along as he can,” Tom said.
CNBC reporters heard Bezos’ remarks on a recording from a meeting last week. Bezos offered that there is a remedy to Amazon’s downfall, and that is focusing on customers. He said that the company should never look inward, focusing on itself instead of customers’ best interests. If customers don’t come first, it will be the “beginning of the end.”
“Generally, when big corporations do go away, it feeds a lot of small corporations,” KIRO Radio’s John Curley noted, pointing to Nokia in Finland that eventually struggled and lost government contracts, prompting a range of startups in that country.
“All of a sudden the marketplace was more competitive … all the capital wasn’t being sucked up by one monster,” he added. “When an elephant dies, it ends up feeding so many other things, as it’s decomposing, it’s providing food for others.”
The frank conversation at Amazon comes as the company further expands its reach and footprint. The online retailer announced this week that it will construct three new operations in New York, Virginia, and Nashville. Its highly anticipated HQ2 will be split between New York and Virginia, employing about 25,000 people each. The company will build a new Center of Excellence for operations in Nashville. That center will cover customer fulfillment, transportation, supply chain and other needs. It will employ more than 5,000 people.
“The fact that stock prices have quadrupled in the past five years, I think a lot of people have faith in Jeff Bezos,” Tom said. “He’s looking long term.”
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