David Limp, senior vice president of devices and services at Amazon.com Inc., presents the Amazon Echo Dot smart speaker during an opening event at the company’s Spheres headquarters in Seattle, Washington, US, Thursday, September 20, 2018.
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Amazon has not given up on the Alexa voice assistant, hardware chief Dave Limp said there, even though the team behind the technology was the prime target of the biggest layoff in the company’s history.
Amazon last year began laying off employees in the company’s workforce as part of CEO Andy Jassy’s broader move to cut costs amid a worsening economic outlook and slowing revenue growth. The company’s device and services organization, which oversees the development of products such as Alexa, the Echo smart speaker and Kindle e-readers, is among the affected groups.
Just under 2,000 people in the Limp division were let go due to job cuts, he told CNBC’s Jon Fortt in an interview on TechCheck.
This week, Jassy said the company aims to eliminate more than 18,000 roles, mostly in its stores and human resources organizations. Previously, a person familiar with the matter told CNBC that 10,000 employees would be cut, but noted that number is fluid and subject to change.
In addition to the layoffs, Amazon has also frozen new hires in the company’s workforce, and shut down several other experimental projects, such as telehealth services and video calling devices for children.
“What we’re doing is looking at projects that maybe, in this uncertainty, the risk reward for the project and what we can deliver to our customers is not there,” Limp said. “Part of it is in Alexa, part of it is in other parts of my organization.”
Still, Amazon remains “fully committed” to the Alexa unit even as the company takes steps to be more disciplined with costs in an “uncertain economy,” Limp said.
“There are still thousands and thousands of people working on this project,” Limp said, speaking from the Consumer Electronics Show in Las Vegas. “It’s a big project.”
Since its launch in 2014, Amazon has invested heavily in Alexa and given top talent to develop the technology, especially under the direction of Jeff Bezos, who first created Alexa and strongly believes that voice will play an important role in the way people interact with computers. tomorrow. At one point, Amazon had 5,000 people working on Alexa and Echo.
Amazon has been selling devices such as the Echo at or near cost because their goal is not to make money. Instead, the company is a vehicle to bring customers into the broader Amazon ecosystem, where they will buy anything from amazon.com or other properties.
Limp rejected the idea that Amazon would have to raise prices significantly because it would require more difficult costs. The price of some commodities used in Amazon’s devices, such as memory and displays, has increased, and may be passed on to consumers, he said. But most of Amazon’s hardware business model remains the same, Limp said.
“We try to sell our products approximately at break-even, sometimes a little more,” said Limp. “Then, when customers use it, say they’re buying from Alexa, that benefits all of Amazon, and gives customers a great shopping experience, and so we want to monetize those things going forward.”
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