Employees within Amazon's once-iconic hardware division, which develops products like the Kindle reader and Echo voice-assistant, have noticed a sharp drop in morale following mass layoffs and worries that their current pipeline of devices may not be successful. Lab126, the division in question, was a pet project of founder Jeff Bezos, but has recently experienced a wave of executive departures, including leader Dave Limp, a 13-year veteran who is set to leave later this year.
Reuters interviewed 15 current and former employees who asked to remain anonymous and they claimed a mix of devices are in development, some of which utilize Alexa voice service in the face of AI chatbot tools like ChatGPT. Amazon plans to hold an event on September 20th to introduce several new products, including a refreshed version of existing items like the Fire tablet, Fire TV stick, and Kindle Scribe e-reader. The news agency identified five devices under construction, namely a carbon monoxide detector, energy consumption monitor (both with Alexa), a home projector, digital measuing device, and a virus-testing tool.
Amazon intends to get customers to install more Alexa-enabled devices and to accustom them to using the system on a daily basis. However, some of these new projects may never make it to the commercial market for financial or market-related reasons. For years, Lab126 has been a cornerstone of Amazon's desire to establish itself as a tech innovator, but the device unit has yet to generate a profit. In fact, products such as an Alexa-powered clock, Fire smartphone, and camera have all been commercial failures, affecting morale at Lab126.
In order to compete in an environment increasingly dominated by generative AI and chatbots, Amazon is working on innovating its own generative AI, but the details remain scarce. Alexa is mostly accessed through products such as TVs and Echo speakers and answer spoken queries, as well as enable purchases from Amazon's online store. It is also a viable home automation hub, allowing voice control of lights and appliances. But, without control of the smartphone, Amazon is limited in its success as voice-first is not an ideal shopping experience.Amazon is expected to name Microsoft's Panos Panay as successor to Dave Limp, who has overseen device strategy including Ring video doorbells. Limp plans to exit before year's end. This follows two other longtime executives, Gregg Zehr and Tom Taylor, who retired last year. Ken Washington, who oversaw Astro, left after less than two years to join Medtronic in May.CEO Andy Jassy has been reducing Amazon's headcount, resulting in 27,000 job cuts across the company, including Alexa employees. Alexa has lagged behind Google and Apple's Siri in terms of users, with 71.6 million compared to 81.5 million and 77.6 million, respectively.Amazon has said in the past they can sell devices for close to production cost and make money from services offered on them. This has worked with Amazon's Kindle group, and customers who own an e-reader purchase e-books for years, with Amazon taking a cut of each sale. Their efforts to make money from Alexa have been focused on facilitating purchases from Amazon.com.However, many customers are not buying things they wouldn't normally due to the inability to compare products as on the website. As a result, Amazon has shifted their focus to producing devices for cheaper to make money from the sale of hardware itself. This price-oriented approach has caused delays for an advanced projector, which Amazon is developing to cast images around a room. Both Microsoft and Amazon declined to comment on the matter.
Comments