Amazon’s Alexa department has been brandished a ‘colossal failure’, expecting a $10bn loss this year while the company lays off approximately 10,000 staff, with many being from the Alexa team.
According to reports from Business Insider, Amazon is struggling to monetise interactions through the Alexa platform.
The widespread adoption of Amazon’s Alexa, particularly in entry-level smart homes, led to Echo devices being one of the company’s best-selling products since its debut in 2014. However, the devices were sold at cost with the expectation that Amazon would make its money back through interactions with the device, but that hasn’t materialised.
Surveys conducted by Amazon have found that voice commands are most commonly used for simple tasks, such as setting timers, playing music and hearing the weather forecast, all of which are not making the company any money.
Business Insider’s report details that many current and former employees have described Amazon Alexa as “a division in crisis” and “a colossal failure of imagination” while “just about every plan to monetise Alexa has failed”.
In a recent statement from Andy Jassy, Amazon’s CEO, he explained that the company has “weathered uncertainty and difficult economies in the past” which is expected to continue. However, Jassy also said that Amazon has “big opportunities ahead, both in our more established businesses like Stores, Advertising and AWS, but also in our newer initiatives that we’ve been working on for a number of years and have conviction in pursuing”, with Alexa being one of these.
But could this be the end of Amazon’s Alexa?
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