The Latest Details on the Amazon Layoffs and the Impact on Alexa – Updated
Editors Note: Updated on November 17 to add news of voluntary layoffs and potential shuttering of the AWS startups program.
Amazon began layoffs earlier today, and the impact is wide-ranging. The devices division, where Alexa and its associated products reside, bore much of the cost-cutting impact. However, sources tell Voicebot that much of the Alexa core remains untouched or lightly impacted. Data for this story comes from a variety of sources with inside knowledge of Amazon’s cost-cutting actions.
Affected Alexa Programs
While many people in the voice AI community were hopeful that the Alexa programs would remain untouched, that optimism was unfounded. It also may have been unwarranted. Amazon launched a lot of devices over the past six years and quietly shut down many of them. Just a few examples include Echo Tap, Echo Spot, Echo Look, Echo Loop, Echo Flex, Dash Wand, Cloud Cam, and Amazon Glow. You might also have trouble finding the Amazon Basics Microwave and Amazon Smart Oven.
The company has driven innovation by trying a lot of different product ideas. When demand was weak or strategic alignment with the portfolio was poor, the products were sent to pasture. Software products related to Alexa did not seem to face this type of reckoning, until now.
It appears that Alexa Ambient, announced just over a year ago, will be shuttered. Alexa Health and Wellness will face a similar fate. Alexa Games and Alexa Communications are facing significant layoffs, and the Luna gaming service, along with several other Amazon groups unrelated to Alexa, will have much smaller teams. Halo will face significant pullback, and it would not be a surprise if that is soon slated for end of life.
Update: Voicebot also learned on November 16th that Alexa Auto, Alexa Skills Kit, Alexa Speech, Alexa Guard, Alexa Proactive Experiences, Alexa Routines, Alexa Video, and Alexa Marketing were impacted by some layoffs.
Maybe more notably, the Device Design Group is slated for significant layoffs. That suggests Amazon’s appetite for non-stop new product introductions has ebbed. Expect fewer new products in the coming years while the company doubles down on a few product lines that are already working.
It appears the Astro robot team will survive after minimal layoffs. The evangelism team for Alexa skills and enterprise services will be largely unaffected. Alexa Advertising, Alexa Kids Experiences, and Alexa Platform all appear to be spared headcount reduction. What makes these groups different? They all generate revenue in some way.
What Laid-Off Workers are Getting
Several sources said that workers notified they are losing their jobs will remain on the payroll for 60 days, during which time they can try to find a match with another role in Amazon to maintain their employment. After that time, the employees that are not placed will be let go and receive one week of pay for every year they have worked at Amazon. There is conflicting information, but it appears everyone will receive at least four weeks of severance after the 60 days, which comes out to about three months of salary at a minimum.
Update: Voluntary Buyouts
CNBC reported that “Amazon is offering voluntary buyouts to some employees inside the company.” The “voluntary severance” offers are going to human resources and employee services divisions. The severance package includes three months of pay plus one week of salary for six months with Amazon and includes healthcare payments through the end of December. This move is in advance of these divisions, and potentially others, initiating reorganizations that could lead to future layoffs.
What this suggests is that the layoffs announced this week are the start of the process and not the conclusion. Amazon CEO Andy Jassy is facing economic headwinds and seemingly has a free hand to cut costs and realign the business. This may have been difficult to do when still under the shadow of founder Jeff Bezos but after more than a year on the job and facing a dynamic economic environment, the stage is set to see Jassy’s Amazon vision emerge. Right now, that means cutting costs. We will have to wait to see what it means for the future direction.
While internal organizations are seeing the voluntary severance program now, this is likely to come back around to devices. The layoffs were the result of the more obvious areas to make cuts. As Amazon gets through the holiday shopping season and has more data on device sales, it will have a clearer picture of what is really worth investing in for the division.
A memo from the devices division senior vice president Dave Limp to employees yesterday said, “We know people across the organization may be impacted differently by this news and will lead with compassion for all team members. While I know this news is tough to digest, I do want to emphasize that the Devices & Services organization remains an important area of investment for Amazon, and we will continue to invent on behalf of our customers.”
There is little chance that Amazon’s devices division is going away entirely. The group includes too many important product lines that drive substantial revenue and align with the company’s core business strategy to disappear. However, you should consider this week’s news, the beginning of the beginning of a new organization and strategy.
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