More and more it is confirmed that 2020 was a true dream for big technology. Teleworking -due to the Covid-19 crisis- and the necessary digitization of companies led many tech companies to considerably increase their workforces and with enviable salaries. 2022 is about to end with a wave of layoffs that has arrived like a tsunami and from which, it seems, few are saved, including Amazon. 10,000 jobs could be destroyed in the next few months, but which area will be most affected?
“Alexa, dismissal.” This could be a message as real as it is cruel for the company’s voice assistant. And it is that the department of the voice assistant unit, where its most iconic product Amazon Alexa is located, will be the most affected, at least this is what Business Insider affirms, which speaks of “the rapid fall of the voice assistant and the Amazon’s largest hardware division.
There is no doubt that Alexa, which has just completed its first decade of existence, has served as an inspiration for the voice assistants of Apple and Google. However, unlike these, she was never able to create a minimum continuous income stream, or what is the same: Amazon’s profits with Alexa are very poor.
Notably, the Alexa division is part of the Worldwide Digital group along with Amazon Prime Video. A division that lost $3 billion in just the first quarter of 2022 with most of these losses attributed to Alexa. In fact, the hardware team is on track to lose 10 billion euros by the end of this year.
Failed attempts to monetize Alexa
According to Business Insider, almost all plans to monetize Alexa have failed. And from Amazon itself they already speak of the voice assistant as a “colossal failure” that has not been able to monetize. Alexa has gone from CEO Jeff Bezos’ pet project in 2019 to financial flop in just three years despite its popularity as one of the best-selling items on Amazon. Although, yes, “most devices are sold at cost price” with tiny margins for the company.
At its birth, Amazon hoped that users would buy through Alexa using its voice assistant, but the result has not been as expected and people have preferred to buy through other channels rather than rely on AI. «Alexa receives a billion interactions a weekbut most of those conversations were trivial commands to play music or ask about the weather,” BI sources say.
Amazon also tried to partner with other companies so that by voice command you could buy a pizza from Domino’s Pizza or call an Uber, but that did not work either. At this time, the company would find itself in a situation of uncertainty about what to do and how to reconvert the poor monetization of Alexa. And all this despite the fact that it ranks third among voice assistants in countries like the United States, where Google’s assistant dominates with 81.5 million users, Apple’s Siri with 77.6 million and Alexa with 71.6 million.
However, the question could be another: Are we facing the end of investments in big tech voice assistants? Google has also shown its inability to monetize simple voice commands as its attempts at display ads and business partnerships have failed. For its part, Siri is also looking for more revenue since, for now, the
