Amazon confirmed on Friday that it is laying off “several hundred” employees in its Alexa division, as part of a broader cost-cutting strategy that has been underway since last year.
The company said it is discontinuing some initiatives in the Alexa division, which oversees the development of the virtual assistant and the Echo devices, to better align with its business priorities and customer needs. The company did not specify which initiatives are being scrapped.
The affected employees in the U.S. and Canada were notified on Friday, while those in India will be informed next week.
The timing for other regions depends on local regulations, according to a memo sent by Daniel Rausch, Amazon’s vice president of Alexa and Fire TV, to the Alexa staff.
The move comes as Amazon’s new CEO Andy Jassy has been trimming costs and eliminating unprofitable projects, amid an economic downturn and slowing growth in its core retail business.
The company has cut more than 27,000 jobs in the past year, including some in its devices and services division, which includes Alexa.
Alexa, which was launched in 2014, has been one of Amazon’s major investments and innovations, largely driven by Jeff Bezos, who envisioned voice as the future of computing. At one point, Amazon had 5,000 people working on Alexa and Echo.
However, Alexa faces increasing competition from generative artificial intelligence and chatbots, such as OpenAI’s ChatGPT, which can create more natural and personalized conversations. Amazon has also teased some updates to Alexa that are based on generative AI, such as composing messages for users.
The Alexa division also has a new leader, after longtime devices head Dave Limp left to join Bezos’ rocket company Blue Origin. Limp was replaced by veteran Microsoft executive Panos Panay.
Rausch said in the memo that Amazon remains “encouraged by the progress we’re making with Alexa,” noting that users have interacted with the virtual assistant “tens of millions of times every hour,” and there are more than 500 million Alexa devices in consumers’ homes.
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