Amazon has started a new round of cuts in the Alexa division. According to the company itself, hundreds of employees in the sector will be laid off in the coming weeks. The action is part of the cost reduction strategy underway since 2022.
Daniel Rauch, vice president of Alexa and Fire TV devices, sent a note to employees about the layoffs last Friday (17). At first, the cuts are expected to affect people from the United States and Canada. Workers in India and other regions will be notified of the shutdown this week.
Focus on generative AI
“As we continue to invent, we’re shifting some of our efforts to align our business priorities with what we know is most important to customers. This includes maximizing our resources and efforts focused on generative AI,” reads an excerpt from Rauch’s statement.
The note also reports that the changes force Amazon to discontinue some initiatives. This results in the “elimination of several hundred functions” from Alexa’s division.
In 2022, Amazon CEO Andy Jassy initiated actions to reduce the e-commerce giant’s costs. The executive alleges that the company is going through a period of slow growth of the core e-commerce business and faced a loss of $5 billion in operating profit.
The strategy has already involved cutting more than 27,000 employees and shutting down less profitable sectors. For example, hundreds of people from Alexa’s division and the Luna gaming service were laid off in the first round of layoffs in November 2022.
Alexa’s rise and evolution
The virtual assistant Alexa has been one of Amazon’s big bets since its debut in 2014. The management of then-CEO Jeff Bezos believed that technology would have a major impact on the way people interact with computers.
For this reason, the e-commerce giant has relocated the best talents to work in the sector. According to the information, the Alexa and Echo devices division once had more than 5,000 employees.
However, Alexa has come to compete directly with generative AIs and chatbots in recent years. The assistant received several technology-related updates throughout 2023, but none with a wide influence on users’ routines.
However, Amazon announced the initial investment of $1.25 billion in generative AI company Anthropic in September of this year. The company is responsible for the chatbot Claude, a platform very similar to OpenAI’s ChatGPT. According to the information, the contribution could reach up to US$ 4 billion in the future.
