• Adam Selipsky, CEO of Amazon's cloud computing business, will step down from his role next month, the company announced.
• Matt Garman, senior vice president of sales and marketing at Amazon Web Services, will succeed Selipsky after he exits the company June 3, Amazon said.

Adam Selipsky, CEO of Amazon's cloud computing business, will step down from his role next month, the company announced Tuesday.

Matt Garman, senior vice president of sales and marketing at Amazon Web Services, will succeed Selipsky after he exits the company on June 3, Amazon said.

In a memo to employees, Selipsky, 57, said he was leaving AWS after about 14 years to spend more time with his family, and said "the future is bright" for the juggernaut cloud business.

"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.

Amazon CEO Andy Jassy wrote in a separate memo viewed by CNBC that Selipsky has "deftly led the business" and said Garman, an 18-year veteran of the company, has "an unusually strong set of skills and experiences for his new role."

Jassy wrote in a later memo on Tuesday that Amazon's worldwide sustainability organization, headed up by Kara Hurst, will now fall under the company's global communications and community impact division. Previously, Selipsky oversaw the sustainability unit as part of his duties alongside running AWS.

"We've seen that tightly partnering with teams across Amazon is a key ingredient for success in sustainability, and that was one of the most important considerations as I thought about where this team should sit," Jassy wrote in the memo.

In 2021, after Amazon announced that Jassy would take the helm from Jeff Bezos as Amazon's CEO, many people speculated that it was Garman, 48, who would succeed Jassy as the head of AWS. Instead, Amazon tapped Selipsky, then the CEO of Salesforce-owned data visualization software maker Tableau, for the role.

During Selipsky's three years as CEO, AWS has confronted numerous challenges with its business, including a marked deceleration in revenue growth as rising interest rates caused companies to trim their cloud spend. Since last year, AWS has undergone at least two rounds of layoffs as part of broader cuts at the company that resulted in more than 27,000 employees being let go.

At the same time, it has had to respond to a surge in demand for generative artificial intelligence services, spurred largely by Microsoft-backed OpenAI. Under Selipsky, Amazon invested $4 billion in Anthropic, a startup established by former OpenAI employees. As part of the arrangement, Anthropic agreed to designate AWS as its "primary" cloud provider and use AWS' custom-built AI chips.

Its dominant cloud position has also been threatened by Microsoft's fast-growing Azure cloud business. When Selipsky took over for Jassy in 2021, analysts estimated that Azure was about 61% the size of AWS. Now, it's approaching 77%. Microsoft invested billions in OpenAI and its Azure cloud supplies the startup with computing resources.

A source, who asked not to be named, described Garman to CNBC as a "wartime" leader and says change was needed to get more aggressive in AI, where the company is viewed as vulnerable. The person said Amazon founder Jeff Bezos is "very involved" in the AI effort.

AWS is still the cloud leader, and it remains one of Amazon's most profitable business units. It generated $9.42 billion in operating income, or about 62% of Amazon's total, in the most recent quarter.

Selipsky's compensation for 2022 was $41.1 million, with $40.7 million generated in stock awards, according to a securities filing. He didn't receive stock grants this year.

For Jassy, it marks the latest high-profile executive exit. Amazon's devices chief Dave Limp left the company last August to join Bezos' rocket venture Blue Origin. Chris Vonderhaar, an AWS vice president, announced his departure last May, while executives overseeing Amazon's Alexa and hardware research and development groups retired in October 2022.

Here's the full memo from Jassy:

Subject: AWS Leadership announcement

A little over three years ago when Jeff announced my new role, one of my first jobs was to identify who'd take over and lead AWS. It was important to me that we had somebody who understood AWS, valued our culture, would provide strong continuity, and could keep growing the business. We had strong leaders in AWS, several of whom could lead the overall business in the long-term, but who'd benefit from a few more years gaining experience and learning under a more seasoned CEO.

Adam Selipsky was one of the first VPs we hired in AWS back in 2005, and spent 11 years excellently leading AWS Sales, Marketing, and Support, before leaving to become the CEO of Tableau. I've always had a lot of respect for Adam, and we met several times to discuss the possibility of coming back to lead AWS. In those conversations, we agreed that if he accepted the role, he'd likely do it for a few years, and that one of the things he'd focus on during that time was helping prepare the next generation of leadership.

We were fortunate that Adam agreed to step in and lead AWS, and has deftly led the business, while also developing his leadership team. Adam is now going to move onto his next challenge (after taking a well-deserved respite), and Matt Garman will become CEO of AWS, effective June 3rd.

I'd like to thank Adam for everything he's done to lead AWS over the past three years. He took over in the middle of the pandemic, which presented a wide array of leadership and business challenges. Under his direction, the team made the right long-term decision to help customers become more efficient in their spend, even if it meant less short-term revenue for AWS. Throughout, the team continued to invent and release new services at a rapid clip, including several impactful Generative AI services, such as Amazon Bedrock and Amazon Q. Adam leaves AWS in a strong position, having reached a $100 billion annual revenue run rate this past quarter, with YoY revenue accelerating again. And perhaps most importantly, AWS continues to lead on operational performance, security, reliability, and the overall breadth and depth of our services. I'm deeply appreciative of Adam's leadership during this time, and for the entire team's dedication to deliver for customers and the business.

As some of you know, Matt started at Amazon as a MBA intern during the summer of 2005, and joined the company full-time in 2006 as one of the first AWS product managers. Initially working across all of AWS, Matt helped create our first service level agreements, define new features, and create new pricing plans. He then became our first product manager for EC2, and led EC2 product management in its early, formative years. During that time, he also led the team that defined, launched, and operated EBS. Matt eventually became the general manager of all AWS Compute services in 2016, which he did for about four years. In 2020, after having been deeply involved in our product organization for 14 years, I asked Matt to move to the demand generation side of AWS to lead WW Sales, Marketing, Support, and Professional Services.

Matt has an unusually strong set of skills and experiences for his new role. He's very customer focused, a terrific product leader, inventive, a clever problem-solver, right a lot, has high standards and meaningful bias for action, and in the 18 years he's been in AWS, he's been one of the better learners I've encountered. 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. 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.

Thank you again to Adam for his leadership, and please join me in congratulating Matt.

Andy

— CNBC's Kate Rooney and Jordan Novet contributed to this report.