amazon has undertaken the always difficult mission of cutting expenses, in a determination that affects all areas of the company that are not profitable. As reported The Wall Street Journal, Andy Jassy himself, CEO of the firm, is the one who leads the analysis to determine where to pass the scissors. And among so many affected units is the one that covers Alexa.
The aforementioned medium indicates that the main executives of Amazon are closely evaluating the situation of the device business, which is in charge of the development of the virtual assistant. the same is losing about 5,000 million dollars a yearwhich is leading you to think about the steps to follow regarding your future.
This does not mean that Amazon plans to cancel the development of Alexa, far from it. However, it poses serious challenges for what is to come. Especially considering that, according to the report, said area currently has about 10,000 employees and it is one of the ones that receives the most investment. Whether a cost cut alters the pace of software development or the integration of new features remains to be seen.
“Amazon is as optimistic about the future of Alexa today as ever, and it remains an important business and investment area,” a company spokesperson told the WSJ.
In other unprofitable areas of the company, the situation seems to be considerably less benevolent than in the section dedicated to devices and Alexa. It is that the Amazon directive would already be informing employees that their equipment will be closed or suspendedand that they must apply to new positions.
Amazon, in a new push in search of profitability
That the unit in charge of Alexa loses money is not something that surprises Amazon. However, the company turned a blind eye during Jeff Bezos’ tenure as CEO, as it was one of his favorite projects. But now Andy Jassy seems willing to take a tougher stance on this situation.
Cost cutting at Amazon may be more apparent in some areas than others. The robotics section, for example, has taken a hit recently with the cancellation of Scout, its autonomous delivery robot.
Although the measure may be unpleasant, it has become clear that it is necessary. Financial results for the third quarter of 2022 revealed that Amazon’s spending has grown out of control, despite attempts to keep it in check. The company reported revenue of $127.101 million, while expenses had a year-on-year increase of 18% and reached $124,576 million.
It is true that profits of 2,800 million dollars meant a return to profitability after two quarters of losses. Despite this, concern about the impossibility of controlling expenses remains at very high levels.
But Amazon’s intention is not only to recover its money by scissoring through its least profitable areas. A few days ago, for example, he announced the brake on hiring at the corporate level.
However, everything indicates that the end of the year will be particularly complex for the US company. It is that the sales projections for the last quarter of 2022 – one of the strongest due to the end of the year holidays – are not as expected. Amazon expects revenue of up to $148 billion, well below the $156 billion forecast by analysts. If materialized, will make the process of cutting expenses even more complex.