Amazon is on pace to lose $10 billion this year from Alexa and other devices

An Amazon Alexa device

Amazon is on pace to lose $10 billion this year on some devices, include its voice assistant Alexa.
Employees on the Alexa voice-technology team are reportedly the primary target of layoffs at Amazon.
The team working on Alexa was one of the most supported by Jeff Bezos because it was his brainchild.

Amazon’s voice assistant, Alexa, once one of its most quickly growing projects, is now one of its products on pace to lose the company around $10 billion this year.

In the first quarter of this year, the “Worldwide Digital” unit at Amazon, which includes Alexa, Echo devices, and its streaming service Prime Video, had a $3 billion operating loss, internal data obtained by Insider showed. Most of the loss was due to Alexa and other Amazon devices, a person familiar with Worldwide Digital previously told Insider.

The voice assistant was Jeff Bezos’s brainchild, and he supported the team working on Alexa, engaging himself in developing it and reviewing email marketing campaigns for it, someone directly involved previously told Insider. 

When Alexa launched in 2014, Amazon wanted to make sales through people using Alexa, not necessarily through people buying the Echo devices that have the Alexa voice assistant.

But four years after Alexa was released, customers complained about the device sending recordings to the wrong people, and reports came out about Amazon workers listening in on what people were telling Alexa on their devices.

Even though Alexa reached a point where it was getting a billion interactions a week, the interactions, like asking for the weather, were largely not monetizable. 

Alexa and Echo lost around $5 billion in 2018, The New York Times reported. That same year, the company had 10,000 employees working on Alexa and Echo products. By the end of 2019, hiring for that team was frozen, …read more

Source:: Businessinsider

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