Amazon.com announced on Friday that it’s streamlining its Alexa voice assistant unit by trimming jobs, citing a shift in business priorities and a heightened focus on generative artificial intelligence (AI). The job cuts impact several hundred employees within the Alexa team, although the exact number remains undisclosed.
Daniel Rausch, Vice President of Alexa and Fire TV, explained in an email that the company is realigning efforts to better serve customer needs and concentrate on generative AI. This strategic shift has led to the discontinuation of some initiatives, particularly in the devices division. Amazon has been undergoing a series of cutbacks in various departments this month, including music, gaming, and certain human resources roles.
While the majority of affected roles were in the devices division, some employees working on Alexa-related products in a different unit also faced layoffs. The move reflects a broader industry trend of companies redirecting resources toward generative AI, capable of generating software code and extensive text responses from concise prompts.
Alexa Role and Challenges
Alexa, a voice assistant known for tasks like setting timers, answering queries, playing music, and serving as a home automation hub, has been a cornerstone of Amazon’s technology lineup. However, reports earlier in the year highlighted concerns about morale in the devices division due to perceived weaknesses in the product pipeline, with some critics pointing to Alexa’s perceived lag in adapting to the era of generative AI.
In September, Amazon refuted these concerns, stating that a few anecdotes did not accurately represent the overall picture of its large and diverse Devices and Services organization. The company maintained confidence in its products despite challenges.
Despite its success, Amazon has not reported profitability in its devices and services business. Last month, Panos Panay took over as the new chief of the device unit, succeeding David Limp, who is set to leave later this year. The struggles to generate profits from Alexa, used primarily through Echo speakers or video screens, have prompted Amazon to explore revenue streams, with a focus on facilitating purchases from Amazon.com.
Competition in the Voice Assistant Market
Competing with offerings from Alphabet and Apple, Amazon faces challenges in a highly competitive voice assistant market. Over the past year, Amazon has cut more than 27,000 jobs across the company, part of a broader wave of tech layoffs in the U.S. after significant pandemic-driven hiring.
Despite these challenges, Amazon reported third-quarter net income that exceeded analyst estimates, and its forecast for the fourth quarter aligns with expectations. The fourth quarter is crucial for Amazon, encompassing the holiday shopping season.
In his email, Rausch expressed optimism about Alexa’s future, acknowledging the complexities of integrating a new large language model into a voice-forward, personal AI.
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