Report: Amazon Losing $5B Yearly On Alexa

According to reports this week, Amazon is preparing to lay off as many as 10,000 employees, marking its largest-ever round of job cuts, though only about 1% of its total global workforce.

The cuts will reportedly begin as soon as this week, and they’re said to focus on corporate and technology jobs, specifically the retail side, human resources, and Amazon’s devices unit, including Alexa—a division reportedly losing as much as $5 billion a year. The New York Times, which first reported the news of lay-offs, says the total number of layoffs “remains fluid,” but 10,000 would equal about 3% of Amazon’s corporate head count.

The Wall Street Journal reports Amazon is currently considering whether it should focus on trying to add new capabilities to Alexa Adding capabilities would require greater investment, and many customers use Alexa for only a few functions, some of the people said.

Amazon also has told employees in certain other unprofitable divisions to look for jobs elsewhere in the company because the teams they were working on were being suspended or closed, some of the people said.

“Our senior leadership team regularly reviews our investment outlook and financial performance, including as part of our annual operating plan review,” an Amazon spokesman said in a statement. “As part of this year’s review, we’re of course taking into account the current macro-environment and considering opportunities to optimize costs.”

The spokesman said Amazon is “as optimistic about Alexa’s future today as we’ve ever been, and it remains an important business and area of investment for Amazon.”

The news comes just weeks before the beginning of the holiday shopping season, which Amazon is already hyping up in announcements, outlining plans “to release millions of Black Friday deals.” It’s an incredibly busy time of year for Amazon, and one for which, in previous years, it’s tried to depict control and stability. This year, though, that narrative is colliding with a gloomy market and investor pressure to trim business fat.