Amazon has confirmed it is laying off “several hundred” jobs in its Alexa division, the latest move in the company’s strategic reprioritization and significant cost-cutting that began in early 2023.
According to a memo written by Daniel Rausch, Amazon’s VP of Alexa and Fire TV and obtained by GeekWire, the layoffs are part of an effort to better align with customer needs and priorities, “which includes maximizing our resources and efforts focused on generative AI. These shifts are leading us to discontinue some initiatives, which is resulting in several hundred roles being eliminated.”
Amazon didn’t specify how many employees will be laid off, but the company has cut approximately 27,000 jobs this year. The company’s devices and services division, which includes the Alexa group, had been impacted by this initial downsizing.
Capitalizing on Gen AI Growth
Alexa and Amazon’s portfolio of smart home devices, which include the Amazon Echo Show, Echo Pop and others, have generated a lot of buzz for their commerce potential. Nearly three-quarters of smart-speaker usage is commerce-related, according to data from Capgemini Research Institute. Brands like GNC have attempted to capitalize on this value by creating dedicated “skills” to support seamless reordering. However, conversational commerce as a category, particularly via smart speakers and virtual assistants, hasn’t moved into the retail mainstream.
Instead, Amazon is emphasizing generative AI: Amazon Ads launched a new image-generation solution that allows creative marketing teams to harness AI and create ad content at scale. The company also pointed to the possible value of gen AI for AWS customers.