Amazon killed Alexa
In the mist of the digital industry realizing staff is costly and cannot have staff growth totally disconnected to the company growth, Amazon announced a first cost reduction. The first wave is announced with a 10% reduction. While it is not a significant reduction by comparison with the past year's growth, it is targeting some specific teams. 10% is not bringing Amazon back to the staff size of previous years - still a growth as highlighted by the analysis summarized by macrotrend.net.
10% downsize is not bringing Amazon to last past years sizes
Staff vs Revenue growth analysis by macrotrend.net
The targeted teams will face more significant reduction. But only one area has been directly called out by several corporate communication blaming the results and the miss growth. Alexa department is now known as a major failure costing #10b per year.
While the revenue results are definitely not telling a good story, the number of active users is quite aligned. The voice device industry was almost created by Alexa is now led by google. Even Siri, the criticized "dumb" assistant is reaching the second place of number of users: Alexa has a little over 70 million users, over 75 for Apple Siri, and over 80 for Google.
Amazon did not find the business model to monetized Alexa. Like all the other digital assistant, the main usage remains knowing what the temperature is outside and launching the next music. Unfortunately, the assistants still face difficulties to help on little more complex task. Even asking to start a specific movie on Netflix in the living room tv is often a challenge.
Alexa's 70 million users are real users, mostly organic since Amazon product strategy does not provide overlap or cross opportunity. Those results to be compared with Google and Apple figures leveraging a large number of phone users with the assistant already setup or converting by convenience to the digital assistant. This figure should be considered in Amazon strategy redefinition.
Unfortunately, with Amazon corporate message blaming Alexa division for those terrible results, the confidence level of the potential new clients dropped instantly. On purpose or just terrible timing, this annoncement arrived few weeks before black Friday and cyber-Monday. Therefor the bad footprint of Alexa's devices will get worst in the 2022 highest sales period.
Alexa led the digital assistant market creation and provides a unique organic product growth
The number of employees is not a factor of success. And few smart teams are definitely more efficients than thousands without strategy. But the challenge of the digital assistant is ... the currently lack of "smartness". Therefor the usecase are remaining limited and not really monetizable. If it was easier, with a good level of control to order things with Alexa, clients would have done it. But the future of any player in this industry will depend on the volume of data available to teach those smart usecases. Therefore, reducing the base is likely not a smart choice for a smart assistant.
In the meantime, lets dream about all the usages we would have ask Astro, the Alexa robot with a cute face. A little strategy, a made in America stand, and simple usecases with the client endgame in mind would allow us to play with Astro very soon.