Amazon is currently in the process of conducting its biggest-ever round of layoffs, with plans to eliminate some 10,000 jobs across the company.
One of the areas hit hardest is the Amazon Alexa voice assistant unit, which is falling out of favor with the e-commerce giant.
This is according to a report from Business Insider, which details the "swift downfall of the voice assistant and Amazon's larger hardware division."
Alexa has been a voice assistant for 10 years and has been copied by Google and Apple. However, Alexa has never managed to create an ongoing revenue stream.
The Alexa division is part of the "Worldwide Digital" group along with Amazon Prime video. This group lost $3 billion in just the first quarter of 2022. The report says the hardware team is on pace to lose $10 billion this year. So it can be said that Amazon is tired of burning through all that cash.
The BI report paints a picture of a company division in crisis, with a former employee describing Alexa as a "colossal failure of imagination" and "a wasted opportunity."
The layoffs are the result of years of trying to turn the situation around, with a 2019 all-hands meeting to try and improve the monetization problem being fruitless.
Jeff Bezos reportedly lost interest in the project in 2020, and new CEO Andy Jassy is not as protective of Alexa.
The report claims that Amazon's Echo line is selling well, but most of the devices are being sold at cost. One document reportedly described the business model as making money when people use the devices, rather than when they purchase them.
The plan to have people buy things on Amazon via their voice never really worked out. The hope was that people would be comfortable enough to trust an AI with their money to make purchases without seeing a picture or reading reviews.
However, according to a report, by year four of the experiment, most people were only using Alexa for trivial commands like playing music or asking about the weather. Since those questions don't lead to monetization, the plan was ultimately unsuccessful.
Similar problems are also valid for other voice assistants, like from other tech giants Apple and Google, so it seems like Big Tech voice assistants may not be long for this world.
Google admitted to similar problems with its Google Assistant business model last month.
Both companies are struggling to find a way to monetize the assistants, and have resorted to cutting back on resources for the divisions.
Although Apple managed to theoretically strike a more sustainable business model, its devices did not land with customers, so it is continuing to try to provide a solution also.
It's unclear how much longer these voice assistants will be around if they can't figure out a way to make money.
