Amazon Alexa a “colossal failure” — on track to lose R173 billion in 2022

Amazon’s Alexa division faces significant job cuts after failing to turn the voice assistant into a money maker, Business Insider reports (the article requires a VPN to access from South Africa and is paywalled).

Alexa falls under Amazon’s “Worldwide Digital” group, which recorded a loss of $3 billion (R52 billion) in the first quarter of 2022 and is on track to lose $10 billion (R173 billion) this year.

Business Insider spoke to current and former employees on the Amazon hardware team, who described the “Worldwide Digital” group as a “division in crisis.”

One employee described Alexa as a “colossal failure of imagination” and “a wasted opportunity”.

Amazon’s Alexa-enabled Echo devices are among the retailer’s best-selling items.

However, despite each device being sold at a cost, the Alexa business model revolves around the company making money when people use the devices rather than from their once-off purchase.

While Alexa became popular to the point that it saw a billion interactions a week, the interactions related to non-monetisable aspects, such as asking for an update on the weather.

Amazon first launched the voice assistant in 2014. However, the company has struggled to monetise the use of Alexa-enabled devices.

The international ecommerce giant looked into partnering with companies like Uber and fast food restaurants to let users order rides or food from their Alexa devices, with the intention of Amazon receiving a kickback from the transaction.

However, this also appears to have failed, and Business Insider’s report says the company stopped posting sales targets for Alexa by 2020.

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Amazon Alexa a “colossal failure” — on track to lose R173 billion in 2022