Amazon job cuts will continue to 2023, says CEO
Alexa and the devices team are now the main targets of Amazon layoffs
Amazon will continue to engage in buyouts and layoffs next year, according to CEO Andy Jassy.
Amazon announced job cuts at the company last week, saying management had decided to consolidate some teams and programmes after an evaluation.
The e-commerce giant declined to disclose the exact number of workers being let go, although earlier reports estimated that the moves would affect about 10,000 people, or 3% of worldwide staff.
On Wednesday, Dave Limp, SVP of Devices & Services, informed staff that his division would face cuts.
Andy Jassy said on Friday that layoffs were the result of the "challenging "state of the economy and rapid hiring in recent years.
"We are in the middle of our annual operating planning review where we look at each of our businesses and make decisions about what we believe we should change.
"Leaders across the company are working with their teams and looking at their workforce levels, investments they want to make in the future, and prioritising what matters most to customers and the long-term health of our businesses. This year's review is more difficult due to the fact that the economy remains in a challenging spot and we've hired rapidly the last several years."
Jassy said the yearly planning process will continue into the new year, meaning there will be further job cuts as "leaders continue to make adjustments."
While management has not yet determined precisely how many additional jobs will be affected, Jassy hinted that there would be cuts in the Stores and PXT groups, and each leader would inform their individual teams when the specifics have been worked out.
"Alexa, get the axe"
Despite an improvement in Amazon's third-quarter earnings from previous quarters, overall profits fell short of expectations. As a result, Amazon was already making cuts in several areas even before it announced the latest layoffs.
Reports allege that Amazon's Alexa and the whole devices team are now the main targets of the layoffs - the largest in the company's history.
Business Insider says it spoke with more than a dozen current and former employees of the hardware team who claimed that the division was in a state of crisis.
Alexa, Amazon's personal virtual assistant, has been available to customers since 2013.
Alexa is compatible with a variety of Amazon devices, including the Amazon Echo, Amazon Echo Studio, Amazon Echo Flex, Amazon Echo buds, Amazon Echo frames and Amazon Echo Loop.
Once one of the company's most rapidly growing projects, recent developments - such as escalating losses and major employee cutbacks - underscore how quickly the voice assistant, and Amazon's bigger hardware business, have fallen on hard times.
"Alexa is a colossal failure of imagination," one former employee said. "It was a wasted opportunity."
According to internal data acquired by Insider, Amazon's Worldwide Digital division, which covers everything from the Alexa voice service and Echo smart speakers to the Prime Video streaming service, experienced an operating loss of almost $3 billion during the first quarter of 2022 - by far the largest area loss.
A source familiar with the division said the overwhelming bulk of the company's losses could be attributed to Alexa, as well as other devices.
Employees told Insider that over the last several years, a mix of poor morale, unsuccessful revenue efforts, and a lack of engagement among customers and engineers left them feeling as if the team was in a state of deadlock.
Additionally, Alexa was unable to compete once Google and Apple increased their investment in voice control technology.
According to Insider Intelligence, Google Assistant presently has 81.5 million users in the United States, followed by Apple Siri with 77.6 million. Alexa lags behind with just 71.6 million users.