Alexa will lose Amazon $10 billion this year alone
(Pocket-lint) – Amazon’s Alexa smart assistant will lose the company around £10 billion this year alone, according to a new report, with most hardware sold at a loss. Amazon first announced Alexa way back in 2014 and it immediately took the world by storm with the Echo smart speakers putting the digital assistant into homes around the globe. However, a recent report suggests that “Alexa is on life support”, with the assistant having failed to live up to Amazon’s lofty expectations.
It’s thought that the teams responsible for Alexa and its devices are now in Amazon’s crosshairs, with layoffs a possibility amid a wider tightening of belts in the technology sector.
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While Amazon was previously happy to lose money on Alexa and Echo devices because it saw the possibility of making that money back elsewhere, that now isn’t thought to be the case. “While Alexa was once one of the company’s most rapidly growing projects, the mounting losses and massive job cuts underscore the swift downfall of the voice assistant and Amazon’s larger hardware division”, an Insider report notes. Amid reports that Amazon could choose the Alexa team as a target for new layoffs, Amazon’s senior vice president for devices and services, David Limp said that he was “incredibly proud of the team” and suggested that “we know we will lose talented Amazonians from the Devices & Services org as a result” of the current situation.
What all of this will ultimately mean for people buying Echo devices and using them to check the weather remains to be seen. But it’s that usage – checking the weather, starting timers, etc – that has caused Alexa to become so problematic for Amazon in recent years. Amazon expected people to use their Echos to order toilet rolls and other consumables using their voice.
Instead, they’re asking it to remind them when to take their dinner out of the oven.
Writing by Oliver Haslam.