Amazon reportedly considers downsizing Alexa as tech giants scramble to cut costs

Friday, November 11, 2022 by Robinhood Snacks |
Bad robot (Joby Sessions/Getty Images)

Bad robot (Joby Sessions/Getty Images)

“Alexa, stop losing money”... There’s trouble in the house Bezos built: Amazon is looking to cut costs, notably in its Alexa division, a WSJ report says. In the past three years Amazon spent lavishly as ecomm demand surged: it hired 800K+ workers and splurged $10B on acquisitions, including Roomba maker iRobot and health clinic One Medical. But now that rising prices are denting profits, the Prime padre is looking to cut costs:

  • Try harder, Alexa: Amazon’s Alexa team has 10K+ employees (about as many as Snap and Airbnb combined) and has lost up to $5B annually in recent years. Now Amazon is said to be encouraging Alexa workers to find jobs in other divisions.
  • Company-wide: Amazon has lost $3B this year — after making $33B in profits last year. Cue: Amazon just announced a hiring freeze.

Alexa has company… Numerous tech giants have resorted to radical cost cutting as the Fed’s hikes have hit rate-sensitive tech businesses hard. This week Meta laid off 11K employees (13% of its workforce), and 330+ other techies have laid off workers this year. Others, including Apple, have frozen most corporate hiring and reeled in spending (think: less $$ for R&D and moonshots).


Not all cost cuts are created equal… Some are easier to reverse than others, and poorly executed cost cutting can be expensive: just look at Twitter, which is already trying to rehire some of the workers Elon fired just days ago. On the other hand, strategic cuts can pay off in the long run: by downsizing growth plans instead of laying off workers, companies like Amazon and Google hope to position themselves for an easier scale-up in the next boom.