Amazon is once again cutting jobs this year. The online retailer wants to cut “several hundred” jobs in the division related to the Alexa assistant program. This emerges from an internal message that Amazon manager Daniel Rausch, who is responsible for Alexa among other things, sent to his employees on Friday. Rausch said the company wanted to discontinue “some initiatives” in the division, which he did not specify.
This is the latest in a series of layoffs for Amazon this year. Amid a slowdown in its business, the company began cutting 18,000 jobs in January, and less than three months later it said another 9,000 jobs would be eliminated. Since then there have been several smaller savings programs. Last week it was announced that jobs in Amazon’s music business were to be eliminated, although it remained unclear how many. Just a few days ago, the company informed its workforce that it wanted to eliminate around 180 positions in its video game division.
Enthusiasm about Alexa is cooling down
The activities surrounding Alexa were also affected by previous job cuts. The assistance software, which listens to voice commands, is housed in various devices, some of which Amazon sells itself, for example speakers with the brand name “Echo”. Alexa and competing programs like Google Assistant became very popular. Amazon had high hopes for this area; Alexa was one of the favorite projects of founder Jeff Bezos, who resigned from his position as CEO in 2021.
However, the enthusiasm for Alexa has cooled recently. Many users use the program for a very limited number of simple tasks, such as playing music or getting weather forecasts. Amazon’s hope of making Alexa a vehicle for online shopping and a variety of other tasks across the board has not been fulfilled. The devices sold by Amazon with integrated assistance software also do not have high profit margins. According to media reports, the division has at times brought the group annual losses of more than $5 billion.
Pressure through artificial intelligence
Recently, assistance programs like Alexa have also come under pressure from language models like ChatGPT, which work with artificial intelligence. Amazon has said that it also wants to increasingly upgrade Alexa with AI. In his message to employees, Daniel Rausch announced that he wanted to shift the priorities in the business more towards AI functionalities. He also tried to inspire confidence despite the job cuts. Amazon is “very optimistic” about the future of Alexa and the business remains an “incredibly important part of our business”.
Beyond job cuts, Amazon has announced a number of other cuts this year. For example, the group has reduced its presence in physical retail and, among other things, closed its bookstores. He also postponed a major project for a new administration building indefinitely.
Amazon’s business has recovered somewhat recently. Third-quarter results were better than analysts expected, with Amazon posting double-digit revenue growth and net income of nearly $10 billion. At the end of September, the company had 1.5 million employees around the world, the figure also includes part-time positions.
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