Last week, we learned that Amazon was preparing to lay off around 10,000 employees around the world. Dismissals which would be explained by the poor performance of the group and which would affect both certain people working directly in the e-commerce activity of the firm and engineers around Alexa.
We now know more about the difficulties encountered by Amazon in the segment of voice assistants. In a long investigation, the site Business Insideralso owned by Jeff Bezos, discusses the difficulties encountered by the firm and does not hesitate to point out that ” Alexa is on life support » and never managed to « meet Amazon’s expectations “.
Business Insiderthus had the opportunity to speak with a dozen employees, former or current, of Amazon to understand the reasons which could push the company to dismiss the engineers behind Alexa and the connected speakers Amazon Echo.
Thus, while Alexa’s debut in 2014 may have seemed idyllic, with strong attention paid by Amazon boss Jeff Bezos, things started to go wrong in 2018. It was during this period that the Controversies began to swell around the voice assistant, with revelations that certain conversations could be overheard by Amazon employees. Above all, it was this year that the losses began to accumulate for Amazon’s Worldwide Digital division, in charge of Alexa products and the Echo range. That year, the division suffered losses of $5 billion. Things have not improved since and some sources ofBusiness Insiderindicate that the division is heading for a $10 billion loss for the year 2022. Already in the first quarter of 2022, the Worldwide Digital division suffered losses to the tune of $3 billion. This is the most loss-making division of the firm, largely attributed to Alexa and connected speakers from Amazon.
A failing business model
Still, Amazon’s initial idea with Alexa and Echo speakers was simple. The speakers were sold at a loss, but the American group was counting on the fact that users would use their speakers or their voice assistants to place orders on Amazon and therefore catch up on e-commerce. In fact, users were satisfied with simple voice commands to start music, a countdown or ask for the weather of the day. If the skills of Alexa, designed as partnerships to interact with Uber, Disney or Domino’s, were for a time considered as a financial lever, users and developers only seized it very little. “Alexa is a colossal failure of the imagination, a missed opportunity“says a former Amazon employee, interviewed byBusiness Insider.
In fact, Amazon continues to lose money with Alexa and, despite its efforts, only ranks third among the most used voice assistants, behind Google Assistant and Siri. Even in terms of relevance, when we compared the main assistants on the market last August, Alexa came far behind Google Assistant, just ahead of Siri and tied with Samsung’s Bixby.
Despite the layoffs announced this week, Amazon management wants to be reassuring about the future of its voice assistant. The firm’s head of devices and services, David Limp, said that “We’re committed to Echo and Alexa like never before and will continue to invest heavily in them.“.