Nov 10 (Reuters) – Amazon.com Inc (AMZN.O) is reviewing its unprofitable businesses, including its Alexa-equipped devices unit, to cut costs, the Wall Street Journal reported on Thursday. That pushed its shares up 11%.
After a months-long review, Amazon has told some employees in unprofitable divisions to look for work elsewhere in the company, while redeploying workers from certain teams to more profitable areas and shutting down robots, according to the Wall Street Journal. and retail teams.
The report added that Amazon is closely evaluating its Alexa business and is considering whether it should focus on trying to add new features to the voice assistant, which is available on various Amazon devices.
Adding functionality requires a larger investment, and many customers use devices for only a few functions, the report said.
The Wall Street Journal, citing documents, reported that Alexa’s unit has annual operating losses of more than $5 billion.
“We certainly look at the current macro environment and consider opportunities to optimize costs,” said Amazon spokesman Brad Glasser.
Glasser said the company is “optimistic about the future of Alexa” because it remains an important area of business and investment for Amazon.
Just a few weeks ago, Amazon warned that growth would slow during the busy holiday season when sales are at their peak, and said consumers and businesses wary of inflation had less money to spend.
Last week, Amazon said it would freeze corporate hiring for the next few months due to “unusual macroeconomic conditions.”read more
“Experimenting and running too much stuff that doesn’t generate returns is no longer an affordable luxury for Amazon,” said GlobalData analyst Neil Saunders.
Amazon’s cost-cutting plan mirrors moves by tech giant Meta Platforms Inc (META.O), which said on Wednesday it would cut 13% of its workforce, while other tech giants including Alphabet (GOOGL.O) have also suspended hiring.
Reporting by Chavi Mehta and Nivedita Balu in Bengaluru; Editing by Arun Koyyur and Anil D’Silva
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