Amazon’s Alexa assistant comes under scrutiny as part of a major cost-cutting review led by CEO Andy Jassy, according to The Wall Street Journal. Alexa has become an important part of Amazon’s devices and smart home strategy, but documents seen by the WSJ indicate that the company’s entire device unit has suffered an operating loss of more than $5 billion in recent years.
As part of the review, Amazon is exploring whether it should “focus on trying to add new capabilities to Alexa,” the WSJ writes. It’s unclear what exactly that means, but it appears the company is considering its investment in a product that is apparently… doesn’t make much money in itself.
In a statement, the company expressed support for Alexa, but did not specify how things might change. “In less than a decade [Alexa has] turned into an AI service that allows millions of customers to communicate billions of times a week in different languages and cultures around the world,” Amazon spokesperson Brad Glasser said in an email to The edge. “Even in the past year, Alexa interactions have increased by more than 30 percent. We are as optimistic about the future of Alexa as ever, and it remains an important company and an important area of investment for Amazon.”
Amazon, like other major tech companies, wants to tighten its belts in an uncertain macroeconomic environment. The company is already expecting slower growth this holiday quarter, despite its second Prime-focused sales event in October, and Jassy said in the statement. recent release of Q3 earnings that Amazon is “encouraged” by its efforts to reduce costs in its fulfillment network.
“We remain excited about the future of our larger companies, as well as newer initiatives such as Prime Video, Alexa, Grocery, Kuiper, Zoox and Healthcare,” said Glasser of Amazon. “Our senior leadership team regularly reviews our investment prospects and financial performance, including as part of our annual operating plan review, which takes place each fall. Of course, as part of this year’s review, we’re taking into account the current macro environment and considering opportunities to optimize costs.”
