Exclusive-Amazon device unit morale drops amid cuts, weak growth pipeline-sources

By Greg Bensinger

SAN FRANCISCO (Reuters) – Some employees at Amazon’s hardware division – responsible for popular devices such as the Kindle reader and the Echo voice-assistant – say morale within the division is low due to staff cuts and a pipeline of devices in development. has suffered a loss, which they fear is unlikely to prove a hit.

The division, known as Lab126, was the focus of Amazon founder Jeff Bezos, who portrayed it as an engine for future projects, but it was recently hit by mass layoffs and key executive departures. including 13-year leader Dave Limp. The veteran who has announced plans to step down at the end of this year.

Reuters interviewed more than 15 current and former employees, who spoke on condition of anonymity because of the terms of their employment, who described a range of new tools in development, many of them aimed at providing customers with a once-in-a-lifetime experience. The aim was to encourage the use of the unprecedented Alexa voice service. Which is now facing a tough challenge in the era of Generative AI and ChatGPT.

The company – the world’s largest online retailer – is holding a devices and services launch event on September 20, where it is expected to introduce refreshed versions of some existing products like the Fire tablet, Fire TV Stick and the Kindle Scribe e-reader, among other announcements. Is. , Reuters was unable to determine Amazon’s full plans for the announcement.

The news agency was able to identify five different new devices under development. These include a carbon monoxide detector and a home energy consumption monitor – both of which have Alexa built-in – as well as a home projector to turn any surface into a screen. Other projects are mentioned in some sources, the full details of which could not be confirmed.

Sources said Amazon hopes consumers will install Alexa-enabled devices in more rooms of their homes and become accustomed to using the system throughout the day.

The company also has worked on an Alexa-enabled digital measuring device (for example, to map the dimensions of one’s home) and a virus-testing device initially aimed at detecting Covid, the people said .

Amazon is secretive about its internal projects at Lab126, which has long been key to establishing itself as a tech innovator. Sources said that not all of them will be produced commercially, sometimes due to financial or market concerns, while some have already been reworked or canceled altogether.

Despite being relatively small within Amazon’s vast empire, the devices unit has been symbolically important as a gadget testing ground and the public face of Alexa through voice-assistant devices. Amazon has said without providing figures that its devices and services business is not profitable.

An Amazon spokesperson declined to comment on products under development.

“Suggesting that a few anecdotes paint a picture of the reality for an organization as large and diverse as equipment and services is inaccurate,” spokesperson Kinley Pearsall said in a written response to questions about morale and equipment at Lab126. “The business has been at the center of innovation for over a decade and has created a range of products that are a meaningful part of people’s everyday lives.”

The lab’s years of losses and changing strategies have contributed to low morale, sources said. Many pointed to the Astro home monitoring robot, launched in 2021, which remains exclusive at $1,600 and was criticized for defrauding some consumers.

It was followed by a series of poorly selling devices, such as a voice-assistant-powered watch, the Fire smartphone and a camera that also acts as a personal stylist, sources said.

Amazon is trying to address growing interest in its Alexa voice assistant nearly a decade after its launch and facing competition from a number of startups, including Alphabet’s Google’s AI chatbots and Microsoft-backed OpenAI, the people said. . ChatGPT and other similar tools have dazzled consumers and investors since late last year with their ability to create long-form and coherent text responses to complex prompts, a format that is difficult to translate into a voice assistant.

Amazon said it is developing a generative AI of its own to strengthen Alexa, but said nothing more than the August claim that “every one of our teams is working on building generative AI applications.”

Commonly accessed through devices such as Amazon televisions and Echo speakers, Alexa provides spoken answers to questions and can be used to make purchases from Amazon’s online store. The company has also worked to make Alexa a home automation hub to allow voice control of light bulbs and appliances.

But Amazon has failed to find any consistent means of making a profit from Alexa.

“Amazon’s ability to intrude into consumers’ lives is limited because they don’t have control over the smartphones,” said Avi Greengart, president of analytics firm Techsponential. “Voice-first is not a good shopping experience,” he said.

exodus

Limp, which oversees device strategy including Ring video doorbells, plans to exit before the end of the year. According to Bloomberg, Amazon is set to name Microsoft’s Panos Panay, who oversaw the development of Surface, as his successor. Microsoft declined to comment and Amazon did not respond to a request for comment.

Limp follows longtime executives Lab126 president Greg Zehr and Alexa senior vice president Tom Taylor, who both retired late last year. Ken Washington, who oversaw the Astros, left in May after less than two years to join Medtronic.

CEO Andy Jassy is reducing Amazon’s workforce after nearly doubling it during the pandemic in response to surging online sales. The layoffs also hit Amazon’s retail unit, cloud computing, grocery and advertising divisions.

Alexa employees were included in a round of layoffs that began last year, resulting in 27,000 job cuts at Amazon. Despite widely popularizing the voice assistant, Alexa, with 71.6 million users in 2022, lagged behind Google and Apple’s Siri, which had 81.5 million and 77.6 million respectively, according to analytics firm Insider Intelligence.

For years, Amazon has said it can sell devices close to production cost and see a profit through the services offered on them. This works well with its Kindle group, because as consumers who have an e-reader buy e-books for years, Amazon takes a cut of each sale.

Alexa is another matter. Most of the efforts to make money from it are focused on making shopping from Amazon.com easier. But a dozen people who work on Alexa say they haven’t seen strong evidence that customers are buying things they wouldn’t otherwise buy.

The challenge is that of users like Bruno Borges, 40, of Vancouver, Canada, who said he found that he only used his Echo for timers, music and weather updates.

“I would never shop on it because I can’t compare things like websites, so I wonder if I’m getting the best deal,” he said. He recently put his three-year-old device in a drawer and has no plans to continue using it.

Employees say that in recent years leadership has shifted toward a campaign to produce cheaper devices rather than potentially making money on hardware sales.

The focus on price has led to delays in the creation of an advanced projector that Amazon is developing to cast images around a room, turning regular surfaces into screens, according to five people familiar with the matter. Will give.

With a projector, the user can beam recipes onto the wall above their stove or make Zoom calls that track them as they move. Amazon bought a startup called Lightform to help advance the project, but is intent on reducing the cost of the projector, which Lightform previously offered starting at $700, before selling it for hundreds of dollars less .

(Reporting by Greg Bensinger; Editing by Ken Lee and Claudia Parsons)

Source: ca.finance.yahoo.com