Mehul Robin DasNov 23, 2022 13:43:56 IST
Amazon is currently in the middle of one of the largest mass layoffs in its history. The e-commerce giant plans to wind down about 10,000 people by 2023, and it’s also planning to refocus finances and efforts away from the hardware division. Amazon’s Alexa team, which is responsible for not only the voice assistant, but hardware as well, is one of the hardest-hit departments, with more than half of employees rehired or terminated.
Amazon will lose about $10 billion this year just because of Alexa. Once the pet project of Jeff Bezos, Alexa was one of the best voice assistants when it launched nearly a decade ago. However, Amazon, like Google, has not been able to monetize voice assistant services in any meaningful way.
Moreover, the smart assistant takes up a lot of space and computational power in the Amazon server. With each passing year, it is becoming more and more difficult for Amazon to justify the space this software takes up on its servers and the amount of computing power it takes.
This happened, despite the fact that Amazon has managed to put Alexa in a number of devices and devices that aren’t Echo speakers. Also, the Echo line for Alexa is among the “best-selling items on Amazon.” However, most devices are sold at cost.” The plan with Alexa was for Amazon to want to make money when people use devices, not when they buy them. This backfired massively for the e-commerce giant.
According to a report by Business Insider, the Alexa division along with Prime Video lost about $3 billion in the first quarter of 2022 alone, with the vast majority of losses coming from the Alexa division. The hardware team, like we said, is losing about $10 billion this year.
The Alexa division has been trying to change the monetization of assistive services for years now. An all-out crisis meeting was held in 2019 to try to address the monetization issue, but it was to no avail.
As a result, Amazon Stop hiring people for the Alexa department by late 2019. Bezos also began to lose interest in his pet project around 2020. Bezos’ successor as Amazon CEO, Andy Jassy, is also not interested in protecting Alexa.
Jassy claimed the company still has “conviction in chasing after” Alexa, but that’s after making significant cuts to the Alexa team. However, the Alexa division believes that there is no clear direction for devices in the future, and that since devices are not profitable, there is no clear incentive to stay in this direction.