Amazon Devices Unit Suffers Morale Blow as Cuts and Weak Development Pipeline Weigh

Despite being responsible for popular devices like the Kindle reader and Echo voice-assistant, workers within Amazon’s once-storied hardware division say morale has suffered amid staff cutbacks and a pipeline of devices in development they fear are unlikely to prove hits. The unit, Lab126, was once a focus for Amazon’s founder, Jeff Bezos, who portrayed it as an engine for future projects. But it has been buffeted by high-profile departures and a general need for more momentum in new products.

Among the latest blows was an announcement by CEO Andy Jassy that he would step down later this year, a move that will affect the division’s senior leadership and some staff, including lab employees. That followed news that the device division had lost $10 billion over the past five years, according to sources.

The company has also froze hiring in the department, which employs more than 10,000 people, and is shutting down offices to cut costs during the pandemic. Jassy cited those moves in his memo to employees, saying the company had to focus on its core business during a challenging time for the world.

In recent years, the division has focused on building devices that use Amazon’s Alexa voice assistant, which has been wildly successful but has lagged behind competitors like Google and Apple. The drive to produce devices at a lower cost has resulted in delays for a more advanced projector that could beam recipes on surfaces around a home or turn them into screens to conduct video calls. That project was a critical investment from Amazon’s purchase of a startup called Lightform, but sources said the company had shifted its priorities.

The division has struggled to build a loyal following outside of the company’s most tech-savvy consumers, many of whom already use Amazon Alexa in their homes. That has made it difficult for Lab126 to find the traction needed to justify its existence, so some employees question whether its days as a leader in new technology are numbered.

For some, the question is personal. Keanu Bushell, who works on the night shift in one of the company’s supersize warehouses, saw a note from Amazon in September that he was supposed to return to work on October 1, even though his wife had taken a leave of absence due to the pandemic. He suspected he was being fired, but because he didn’t trust the company’s systems to tally his attendance, he didn’t return to work.

That is just one story of many at Amazon, where hundreds of thousands of workers toil daily in a vast system that recruits, monitors, and disciplines but often fails to communicate effectively with its employees or customers. As the company prepares for its second anniversary of the onset of the pandemic, some of its most essential employees have lost their faith in the system that has made Amazon the world’s largest online retailer and top technology company.

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