Amazon laid off “dozens of engineers” in its Lab126 hardware unit, which makes consumer devices like the Kindle, Echo, and Fire tablet, the Wall Street Journal is reporting.
This news comes in the wake of the critical and commercial disaster that was the Amazon Fire Phone, an entry in the highly competitive smartphone market that turned into a huge black-eye for the e-retailer.
Lab126 employs about 3,000 people, so it’s unlikely that the layoffs — reportedly the first in Lab126’s 11-year history — will ultimately represent a significant portion of its headcount.
But it signals a shift in Amazon’s thinking about consumer electronics, as the e-retailer tries to figure out the path ahead.
This year alone, Lab126 has introduced the $US180 Amazon Echo digital assistant appliance and the Amazon Dash one-button ordering device. The Wall Street Journal’s report indicates that Amazon is also planning a “high-end computer for the kitchen,” kind of like an Echo for the culinary-minded.
Some of Amazon’s devices, such as the Fire Tablet and the Kindle e-reader, have been successful.
But that lack of focus and “shifting, and, at times, enigmatic priorities” has led to a ton of turnover at Lab126, per the report. Some engineers are concerned that the main focus of Amazon’s hardware efforts are just to drive retail purchases from the site, while general morale has been low since the Fire Phone laid an egg so publicly.
Earlier in August, top Lab126 engineer Jon McCormack left to take a job with Yahoo for undisclosed reasons after an on-again-off-again six-year employment with Amazon.
In short, it seems unlikely that Amazon is getting out of the hardware game entirely. But expect a lot more weird, crazy ideas as Amazon figures out where it fits into the hardware game, even as its employee churn skyrockets.
Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.
Business Insider Emails & Alerts
Site highlights each day to your inbox.