Once again, layoffs are coming to Amazon, and this time, it simply adds to the heightened concerns that AI will take over a slew of tech jobs. The e-commerce behemoth has decided to trim hundreds of jobs from its Alexa division. According to media reports, this substantial restructuring has been confirmed by an internal memo circulated amongst Amazon employees on Friday. The crux of this realignment lies in embracing generative AI to bolster Alexa’s capabilities. This strategic shift, however, necessitates the discontinuation of certain initiatives within the Alexa division.
In response to news of the restructuring, Amazon’s shares experienced a modest uptick of about 1% in New York to be currently priced at $144.26 per share. The restructuring within the Alexa division aligns with Amazon’s broader cost-cutting initiatives initiated around a year ago. CEO Andy Jassy led the charge, implementing extensive layoffs that culminated in the elimination of over 27,000 corporate positions, joining the likes of Microsoft, Meta, and others in conducting large-scale layoffs.
This drastic measure was a response to an overhiring surge during the pandemic, and the focus of the cuts extended to the cloud services division, human resources, advertising, and the Twitch livestreaming service. Beyond the Alexa division, Amazon’s cost-cutting measures have extended to various segments. In recent times, layoffs in the music and gaming units have taken place, while we have witnessed the closure of its physical clothing stores.
The company is currently communicating with the impacted employees in the US and Canada via notification emails. The impacted employees in Indian will be contacted next week, the memo says, adding that Amazon is “following local processes in other regions, which may include time for consultation with employee representative bodies, and possibly resulting in longer timelines to communicate.” The severance package given to the impacted employees include a severance payment, transitional health insurance benefits, external job placement support, and paid time to conduct their job search.
“While this was a hard decision to make, we remain very optimistic about the future of Alexa. I want to reiterate that Alexa remains an incredibly important part of our business. I’m proud of the innovation we’ve driven, and continue to drive. Incorporating a new large language model into a voice-forward, personal AI, has been and continues to be an enormous scientific and engineering challenge. I’m excited for our customers to soon experience the future of Alexa, and to hear their feedback, so that we can continue to invent and evolve the experience for them,” Daniel Rausch, Amazon’s Vice President of Alexa and Fire TV, wrote in the memo.
