Amazon is not doing well. The American giant is facing unprecedented economic difficulties that have forced it to take drastic recovery measures. These start with a massive layoff of part of the staff.
According to the latest news, this wave of layoffs will mainly affect several members of the Alexa voice assistant development team. According to Amazon, Alexa would be responsible for a total loss of $ 10 billion. The Echo devices and Alexa assistant that the company had invested heavily in over the past few years never delivered on all of its promises.
Amazon’s “hardware” division: big loser by the failure of the voice assistant Alexa
The American giant posted an operating loss in the first quarter of this year that, according to internal data, exceeds $ 3 billion. A situation that has completely plummeted Amazon’s action on the stock exchange.
To cope with this, Amazon has therefore decided to lay off nearly 10,000 employees. The company also plans to take the opportunity to dispose of some of its failed projects, such as the Alexa voice assistant.
Despite being founder Jeff Bezos’ pet project, Alexa has proven to be a money pit. In fact, some sources point out that the majority of Amazon’s losses are related to Alexa. Indeed, operating costs have fallen from about $5 billion in 2018 to about $10 billion in 2022. Continuing in this direction would then be a suicidal adventure for the company, which has been shaken in recent weeks.
The first to suffer from this failure are the employees of the “hardware” department. The magnitude of the debacle associated with the failure of the famed voice assistant and Echo devices should therefore drag many of its members down. The party seems to be over for Alexa and her development team. The automation process will have to wait.
Hesitation and a lack of strategy buried the project
A commercial failure, no matter how small, is necessarily explained by tangible reasons. In this case, we need to go back to 2020 to reconstruct the web of events whose consequences will be devastating in 2022. If this project was dear to him in the beginning, Jeff Bezos would have initially lost interest given the mixed results of the developers. The founder of Amazon then became less and less involved in marketing campaigns. That took the light out of Alexa.
Sources also said the team was hesitant about what kind of long-term strategy to pursue. Recently, the “hardware” team had planned to update the wireless headsets and an AR product. Unfortunately, due to the process of downsizing and cost reduction, these projects will certainly not see the light of day.
David Limp, Senior Vice President of Amazon’s Devices and Services Division, also commented on the impending layoffs by saying, “I am saddened to announce this news as we know we are going to lose talented Amazonians from the Devices & Services organization. .” .
It is clear that these massive layoffs will cause Amazon to lose ground against competitors in the digital assistant market, Apple and Google.
Source: Apple Insider