Alexa was responsible for around $10 billion in costs this year (watch out, Americans) dollars for Amazon in 2022 and, given the global tech situation, this is one of the major sections with cuts that save the company money.
as a business, Amazon has historically suffered losses in many of its businesses (mainly in Alexa and the difference or margin between the cost of selling several of its speakers) in an effort to grow. While it’s worked for them so far (and pretty well), it looks like those days are coming to an end and The company founded by Jeff Bezos will begin to reduce many sectors of its activity.
It is predicted that Amazon cuts some 10,000 employees according to the latest information and it will do it all over the world. One of the departments that will have the most impact will be the one in charge of producing the Amazon Echo product line (speakers with built-in Alexa) and Prime Video. According to Business Insider, Alexa is in the spotlight.
And it is that, the unit of the digital assistant and the production of its material accumulate some losses of up to 3 trillion only in the first fiscal quarter of 2022 according to internal data. Most of them directly related to Alexa. The losses are the largest of the entire company, doubling those of its physical stores and the “supermarket” activity.
Part of the problem is that, under the control of Jeff Bezos, Amazon expected Echo and Alexa devices to recoup their cost and generate revenue encourage customers to verbally place more orders (has anyone already placed one? – Alexa, ask for an iPhone charger. Really? Which one? How do I choose and see prices/offers? Compatibilities? This is nonsense for most products).
Under expectations that it was initially loss-making, as well as that the original Echo would sell over 5 million units in its first two years, the team overhired in 2016 to surpass 10,000 employees. Being a Bezos pet project, the team also received more protection from internal changes that affected others.
But Alexa seems to have a ceiling
Over time, Amazon discovered that Alexa has been used (and a lot), but for actions with low added value and even less for the company. In other words, what we ask of Alexa is not for Amazon to generate money or over-improve the product. “Alexa, play some music” or “Alexa, let me know in 10 minutes” are some of the more common uses and it doesn’t help Amazon much.
In 2019, hiring for this area was frozen, only vacancies that arose when the team decided to change jobs were filled. It’s all shit: there’s no motivation to grow professionally, the product doesn’t have a lot of room for growth, you can’t hire people to try to improve it or give it another twist, and people end up by leaving. Business daily life.
That same year, Amazon has focused its efforts on understanding the financial performance of its virtual assistant. Hire a specific team to track the behavior of users who buy through Alexa (they would have little work) and Prime subscriptions. Sure enough, the results were disastrous for Amazon.
In 2020, Bezos himself began to lose enthusiasm for Alexa, giving it less involvement in marketing campaigns. It was the start of the decline of Amazon’s virtual assistant.
According to the latest information, the company would study which strategy to choose in the long term for Alexa. Wireless headsets including the Assistant itself or even an Augmented Reality product have reportedly been planned, but are highly unlikely to see the light of day if the cuts continue at Amazon.
As Amazon lays off savvy Alexa engineers and focuses on its “Astro” home robot, This could be a great opportunity for Apple to recruit talent and improve Siri once and for all. to be able to leave an environment where only Google can be Siri’s competitor and with a lot of potential ahead of it. Will the fall of Alexa be a new life for Siri?