Amazon Alexa Deemed ‘Colossal Failure’ Following $10 Billion Loss
Arthur T Knackerbracket writes:
Eight years into Alexa's existence, Amazon has decided the smart assistant hasn't been worth all the hype. The retail giant's most recognizable product has generated a multi-billion dollar loss during its tenure while failing to accomplish what it was made to do: sell more stuff.
Amazon's "Worldwide Digital" unit, which manages Alexa's AI and various hardware, lost over $3 billion in the first quarter of 2022 alone, reports Business Insider. According to the internal data Insider obtained, this loss was "by far" the largest of all Amazon's divisions-and most of it was associated with Alexa specifically.
Alexa (and the hardware it operates through, like Echo, Fire TV, and Kindle) are products in and of themselves, but they're not exactly major money-makers on their own. Instead, they serve as loss leaders, or unprofitable products that exist to get a customer's foot in the door. Amazon isn't shy about wanting you to use Alexa to place more Amazon orders; in fact, many of the company's TV and web ads depict this exact capability. But no one's doing that.
[...] Now Alexa and its associated devices are likely to hit $10 billion in total losses by the end of 2022. This isn't great news for Amazon employees, approximately 10,000 of whom are expected to lose their jobs in the coming months. Worldwide Digital is on particularly thin ice following reports that Alexa-focused employees will mainly be affected.
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