Amazon Lays off Fire Smartphone Engineers in Consumer Product Pullback
Amazon (AMZN) reportedly has laid off dozens of engineers who worked on the online retail giant’s poorly-received Fire smartphone as part of a wider overhaul of the company’s Silicon Valley-based research and development Lab126 operation.
The layoffs, said to be confined to the 3,000 person Lab126 unit, are the first in its history, the Wall Street Journal reported. At this point, the number of engineers who’ve lost their jobs is unclear and Amazon isn’t providing any details.
Lab126 produces a number of Amazon’s consumer products, including the Kindle e-readers and Echo voice-activated speaker.
Early this year, Amazon was said to have overhauled the Lab126 unit following the Fire Phone flop and a $170 million writedown for weak sales and unsold inventory of the smartphone. At the time, the reorganization saw the exit of a number of top executives, including digital products vice president and Fire TV and Echo project head Malachy Moynihan.
Other departures included Ian Freed, Amazon’s devices vice president who oversaw Fire Phone market, who left on sabbatical. And, in multiple reassignments, David Foster, who previously handled the Kindle line, was placed in control of an advanced technologies group exploring new products, and engineering vice president Lindo St. Angel was handed responsibility for developing existing products.
In this latest reshuffle, Jon McCormack, Amazon’s Lab126 devices chief technology officer, who previously departed for Yahoo (YHOO) only to return, has left again, this time for Google (GOOG).
The engineering layoffs are tied to the earlier, broader reorganization in which Amazon’s tablet and e-reader were tied to the Fire phone business unit, the Journal’s report said.
As part of the retrenching, Amazon also is said to have curtailed other Lab126 projects, including a 14-inch tablet dubbed Project Cairo, a smart stylus code-named Nitro, and an image projecting device called Shimmer, the Journal reported.
Still under development is a smart home hub called Kabinet that can process voice commands and a Kindle e-reader battery that could retain a charge for up to two years, the report said.
Lab126, founded in 2004, has come out of the shadows of late, with word surfacing late last year that Amazon would pour some $55 million into the operation, recruiting developers to work on new smart home automation projects and boosting overall employment at two facilities by some 800 people over the next five years.
The California Governor’s Office of Business and Economic Development granted Amazon a $1.2 million tax credit by the state for the unit’s expansion, said to be targeted at a headcount total of 3,750 staffers.