Amazon reviewing Alexa, other divisions to cut costs

Amazon reviewing Alexa, other divisions to cut costs

  • According to the WSJ, Amazon has begun a review of cost-cutting for its businesses.
  • The review will focus on growing back the unprofitable business of the company.
  • Amazon’s device unit, which includes Alexa, has suffered an operating loss of $5 billion per year in recent years.

It seems no one is safe in this economy, including Amazon’s Alexa.

Amazon is joining other tech giants like Meta, Twitter and Microsoft and taking a long, hard look at their least profitable businesses, the Wall Street Journal informed of Thursday.

Amazon stock has already fallen 45% this year compared to last year.

Under its cost-cutting review, which will be led by CEO Andy Jesse, the company will be laser-focused on scaling down its least-profitable businesses. The WSJ reported that Amazon has already asked employees in some unprofitable divisions to look for jobs elsewhere in the company.

One of the areas the company is investigating is its Alexa business. According to internal documents reviewed by the WSJ, Amazon’s device unit — which includes Alexa — has suffered an operating loss of more than $5 billion per year in recent years.

The WSJ notes that the device business currently has over 10,000 employees and has received a large influx of investment.

Alexa was a pet project for Amazon founder and CEO Jeff Bezos until July 2021. He continued to put money into developing Alexa, even though it remained unpopular, people familiar with the matter told the WSJ.

Still, an Amazon spokesperson told the WSJ that customer interactions with Alexa have increased more than 30% over the past year.

Right now, the voice assistant is especially popular among customers for online shopping, playing music on demand, and controlling lighting, thermostats or other features in their smarthomes.

The company is bouncing around with ideas for adding new capabilities to Alexa.

An Amazon spokesperson told Insider that the company remains “excited” about its big businesses and new initiatives, which include Alexa as well as Prime Video, Grocery, Kuiper and Zoox.

The spokesperson said, “Alexa started out as an idea on a whiteboard. In less than a decade, it has grown into an AI service with millions of customers around the world billions of times every week in different languages ​​and cultures. Let’s talk.” “We are as optimistic today about the future of Alexa as we ever were, and it remains an important business and investment area for Amazon.”

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