Amazon is experiencing problems in its devices division. The company’s division, which also includes the Alexa voice assistant, had an operating loss of $5 billion in one year🇧🇷
With that, sources linked to the company say that the division will receive less “attention” from Amazon — at least until the devices are profitable again for Jeff Bezos’ company.
It’s Not “Okay” for Device Splitting
It gets repetitive to say that the big American technology companies (the famous big techs) are in a phase of falling revenue — some with bigger drops, of course. With Amazon it would be no different.
Jeff Bezos’ company, like Meta, experienced strong growth because of the pandemic. With people spending more time at home and adopting the home office, a virtual assistant started to make sense to a lot of people. Soon, Alexa-enabled devices (like the Echo and Fire TV Stick) had their moment to shine.
Documents seen by the newspaper The Wall Street Journal reveal that the glow has begun to fade. The device division, which has more than 10,000 employeeshas been racking up losses in recent years—even passing an operating loss of $5 billion in a year.
The WSJ does not detail the year in which this happened. However, it is worth highlighting what was presented by Amazon in its latest financial result. From September 2021 to September 2022, Amazon saw its profit drop to $11 billion. In the same corresponding 12-month period from 2020 through 2021, profit was $26 billion.
“Alexa, cut expenses and reallocate employees”
Amazon’s Next Step is in deciding what action to take to improve the financial performance of the devices division🇧🇷 One of them is classic: cut investments in the division. Traditional like beans and rice. Thus, devices such as the Echo, Fire TV Stick, Echo Buds and Kindle may remain largely unchanged for a period.
The company also considers increasing the number of resources (skills) in Alexa — precisely so that it leverages the sales of devices🇧🇷 The problem is that, for that, Amazon has to spend more. This proposal runs into another problem: most customers, according to the company itself, use Alexa only for certain functions. Not everyone has a fully smart home — sometimes the Echo Dot is the only IoT device in a home.
Instead — or rather, before — of passing the machete on the staff, the Amazon Is Suggesting Its Employees Seek Relocation to Others at the Company🇧🇷 The reason is that, according to sources for the WSJ, some teams will be suspended or closed. It is following these internal transfers that the mass layoffs must begin at Amazon.
Despite the operating loss, Amazon is still optimistic about Alexa’s future. According to a company spokesperson, the voice assistant “remains an important business and investment area for Amazon.” Alexa, it’s going to be okay.
With information: The Wall Street Journal