Amazon.com to cut 'several hundred' Alexa jobs

2/2 © Reuters. FILE PHOTO: A screen in a Cadillac XT6 SUV displays Alexa on the infotainment system at the Amazon booth during the 2020 CES in Las Vegas, Nevada, U.S. January 7, 2020. REUTERS/Steve Marcus/File Photo 2/2

By Greg Bensinger

(Reuters) -Amazon.com on Friday announced it is trimming jobs at its Alexa voice assistant unit, citing shifting business priorities and a greater focus on generative artificial intelligence.

The cuts affect several hundred employees working on Alexa, according to the email. A spokeswoman declined to elaborate on exactly how many were affected.

"We’re shifting some of our efforts to better align with our business priorities, and what we know matters most to customers - which includes maximizing our resources and efforts focused on generative AI," Daniel Rausch, vice president of Alexa and Fire TV, said in the email. "These shifts are leading us to discontinue some initiatives."

Amazon has been pulling back in a variety of divisions this month, including in its music and gaming divisions and some human resources roles.

While most of the jobs affected were in the devices division, a few were working on Alexa-related products in a different unit, a spokeswoman said. Many companies are shifting resources to generative AI, which can create software code and lengthy text responses from short prompts.

Alexa is a voice assistant that can be used to set timers, ask search queries, play music, or as a home automation hub.

Reuters reported in September that morale in the devices division had suffered over concerns about what some viewed as a weak product pipeline. In particular, people familiar with the matter pointed to the Alexa voice assistant, now nearly a decade old, as having failed to keep pace in the age of generative artificial intelligence.

Amazon said at the time that "to suggest that a few anecdotes paint a picture of reality for an organization as large and diverse as Devices and Services is inaccurate," and that it stood by its products.

Amazon has said its devices and services business is not profitable, without providing figures.

Only last month the device unit got a new chief, Panos Panay, who joined the company from Microsoft (NASDAQ:MSFT), replacing David Limp, a 13-year veteran who is leaving later this year to head Amazon founder Jeff Bezos’ Blue Origin rocket company. Panay had overseen development of the Surface tablet.

Amazon has struggled to generate any profits from Alexa, which many people use through Echo speakers or video screens. Most efforts to make money from it have centered on easing purchasing from Amazon.com (NASDAQ:AMZN).

The Seattle-based online retailer's voice assistant products compete with offerings from Alphabet (NASDAQ:GOOGL) and Apple (NASDAQ:AAPL).

Amazon has cut more than 27,000 jobs across the company over the past year, part of a wave of U.S. tech layoffs after the industry hired heavily people during the pandemic.

The latest cuts come even as Amazon reported third-quarter net income that far exceeded analyst estimates and forecast revenue in the year’s final quarter roughly in line with expectations. The fourth quarter is Amazon’s most crucial, as it includes holiday shopping.

In the email, Rausch said he remained optimistic about Alexa.

"Incorporating a new large language model into a voice-forward, personal AI, has been and continues to be an enormous scientific and engineering challenge," he wrote, using another term for generative AI.