Amazon plans to make changes to Alexa and unprofitable businesses

Cost-cutting measures: Tells workers at unprofitable arms to look for jobs elsewhere

Amazon Chief Executive Andy Jassy is leading a cost-cutting review of the tech giant and paring back on businesses at the company that haven’t been profitable, according to people familiar with the matter.

As part of the monthslong cost-cutting review, Amazon’s leadership is closely evaluating its Alexa business, according to some of the people. The business has more than 10,000 employees and is a major recipient of investment capital, some of the people said. Internal documents viewed by The Wall Street Journal show that in some recent years Amazon’s devices unit, which includes Alexa, had an operating loss of more than $5 billion a year.

Amazon is currently considering whether it should focus on trying to add new capabilities to Alexa, a voice assistant available on a variety of Amazon devices. 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.”

Amazon’s shares rose by more than 4 per cent on Thursday immediately after The Wall Street Journal published news about the cost-cutting review. The stock was up by more than 13% around midday as the market rallied, after data showed that inflation eased in October.