Priority AI Battle! Amazon Alexa Department Shrinks, Hundreds of Layoffs Expected

According to reports, American e-commerce giant Amazon is reportedly laying off hundreds of employees in its smart voice assistant Alexa division, stating that it will invest more resources in developing generative AI capabilities. This highlights the pressure the company faces in the competition brought by generative AI technologies such as ChatGPT.

According to a memo sent to employees on Friday, Amazon's Vice President in charge of Alexa and Fire TV, Daniel Rausch, stated that the company is reallocating resources to better align with its priority businesses, including the development of generative artificial intelligence capabilities. He mentioned that this resource shift will result in the discontinuation of certain projects, leading to the elimination of hundreds of jobs. However, Rausch did not specify which projects will be halted.

Data shows that since its launch in 2014, Alexa has been connected to millions of Echo smart speakers and other Amazon home electronic products. At one point, the department had a workforce of 5,000 employees.

Although Alexa was initially considered groundbreaking technology, Amazon has struggled to expand its depth of use. Its main functions still revolve around basic conversations, such as checking the weather and playing music. In contrast, emerging generative AI technologies like ChatGPT have more powerful conversational capabilities, exposing the limitations of Amazon's software.

Currently, Amazon is still working to enhance Alexa's conversational abilities. In September of this year, Amazon revealed plans to update Alexa with generative AI, such as helping users draft messages. There have also been changes in the leadership of the Alexa division, with Dave Limp, who had long been in charge of the department, joining Jeff Bezos' rocket company Blue Origin. He was succeeded by Microsoft executive Panos Panay.

Amazon had not experienced large-scale layoffs since its inception until a year ago when it had to lay off 27,000 employees due to the expansion of hiring during the pandemic, marking the largest layoff in the company's history. In March of this year, Amazon further laid off 9,000 employees. CEO Andy Jassy stated that the layoffs targeted the cloud services, human resources, advertising, and Twitch live streaming services.

Since then, Amazon has been continuously seeking cost reductions, resulting in more layoffs. Recently, the company has downsized positions in its music and video game departments and closed physical clothing stores.

Rausch stated that employees in the United States and Canada who are affected by the layoffs will be notified on Friday, while those in India will be notified next week. Employees in other countries will be notified according to their respective time requirements. He also mentioned that Amazon remains encouraged by the progress Alexa has made, with hundreds of millions of user interactions occurring every hour on the platform. Amazon's stock rose 1.19% during Friday's trading session, reaching $144.49. The stock has already gained over 68% year-to-date.