Hardware boss insists Amazon is still committed to its Alexa voice assistant, despite major restructuring and job losses
An Amazon executive has rushed to reassure concerned Alexa customers, after the e-commerce giant implemented major job losses in its devices and services organisation.
Earlier this week Amazon said it would close three warehouses in the UK this year, affecting about 1,200 staff at facilities in Hemel Hempstead in Hertfordshire, Doncaster in South Yorkshire and Gourock in Scotland
But last week Amazon announced said it would lay off more than 18,000 staff worldwide, after first stating it would axe 10,000 jobs. Most of the job losses are to impact Amazon’s devices organisation (responsible for Alexa, Echo smart speakers and Kindle e-readers), its retail division, and ironically its human resources department.
Alexa job losses
Andy Jassy also said that Amazon’s job losses would continue into 2023 as he seeks to curtail expenses amid a worsening economic outlook and slowing revenue growth.
Last week Jassy confirmed the number of staff being laid off would increase to 18,000.
Those job cuts have impacted the Amazon Alexa voice assistant division heavily.
Matters were not helped when it was reported the division had fallen out of favour with Amazon’s current management.
Alexa was said to be championed by former CEO and founder Jeff Bezos, but it is alleged that Alexa has never managed to create an ongoing revenue stream for Amazon.
Indeed, it was reported at the time that just about every plan to monetise Alexa had failed, with one former employee branding Alexa “a colossal failure of imagination,” and “a wasted opportunity.”
But now Amazon has sought to reassure that it is still committed to Alexa and the millions of Echo devices the firm has sold.
Hardware chief Dave Limp told CNBC that Amazon hasn’t given up on its Alexa voice assistant, even though the team behind the technology was a prime target of the largest layoffs in the company’s history, with just under 2,000 people in Limp’s division being let go as a result of the job cuts.
Alongside the layoffs, Amazon has also frozen new hiring in its corporate workforce, and shuttered some of its more experimental projects, such as its telehealth service and a video-calling device for kids.
“What we did is we looked at projects that were probably, in this uncertainty, the risk-reward for those projects and what they might deliver for customers wasn’t quite there,” Limp told CNBC. “Part of that was in Alexa, part of that was in other parts of my organisation.”
Still, Amazon remains “fully committed” to the Alexa unit despite the company taking steps to be more disciplined with costs in “a very uncertain economy,” Limp reportedly said.
“There’s still thousands and thousands of people working on this project,” said Limp, speaking from the Consumer Electronics Show in Las Vegas. “It’s a big project.”
Since its launch in 2014, Amazon has made big investments in Alexa and at one point, Amazon had 5,000 people working on Alexa and Echo.
Amazon has sold devices such as the Echo at or near cost because its goal isn’t to make money from them, CNBC noted.
Instead, the company sees them as a vehicle for bringing customers into the broader Amazon ecosystem, where they’ll purchase something from amazon.com or its other properties.
Limp rejected the idea that Amazon may have to raise prices significantly as it takes a harder look at costs, CNBC reported.
The prices of some commodities used in Amazon devices, such as memory and displays, has increased, and those could get passed along to consumers, he said.
But generally Amazon’s hardware business model remains the same, Limp reportedly said.
“We try to sell our products roughly at break-even, sometimes a little bit more,” Limp said. “Then, as customers use them, say they shop from their Alexa, that benefits all of Amazon, and gives the customer a great shopping experience, and that’s how we want to monetize these things moving forward.”