Amazon appears to join the club of tech giants that have to seriously cut down on its ambitions. The unit including Alexa and Kindle, which has generated losses of five billion dollars per year of late, is not hiring any more and may be significantly reduced in the near future.
Huge annual losses
Just like other tech giants, Amazon is looking into how it can reduce costs – see the recent reports of mass lay-offs at Meta/Facebook and Twitter, to name just those two. The company has said it will perform its analysis of cost cutting possibilities – which it does annually – with extra vigour this year. The reason can be found in the difficult macro-economic circumstances.
A focus for this analysis may be the devices unit, which has suffered annual operating losses of five billion dollars, the Wall Street Journal reports. This unit, which includes voice assistant Alexa and e-reader brand Kindle, employs more than 10,000 people.
More Alexa needed?
Founder Jeff Bezos kept spending loads of money on Alexa, but his successor Andy Jassy is now reviewing if the voice assistant still needs such costly expansions, WSJ reports: most of the customers would use just a few functions anyway. However, a spokesperson has since stated that Amazon is as optimistic about Alexa’s future as it has always been, and that the assistant remains an important business and area of investment.
Employees in other onerous divisions – like robotics and retail – would also have been told that they should look for other jobs elsewhere in the company as their teams would be earmarked for suspension. Amazon confirms that a certain number of functions in a certain number of areas are no longer needed, but denies there is something more at play than the annual cost-cutting review. This is despite recent tweets by Bezos that difficult times are ahead and companies should prepare themselves for that.