Amazon's secretive hardware division, Lab126, is struggling.
Amazon is killing its smartphone business, according to a new report from the Wall Street Journal. Apparently the failure of the Fire phone, which the company released last year, with much fanfare, forced Jeff Bezos to discontinue development of some consumer devices, including the phone business.
Sources said that dozens of engineers at Amazon's then-esteemed Lab126 have been fired, hurting the morale of other workers at the secretive hardware laboratory in Silicon Valley.
The layoffs are a first in the division's history. After 11 years of pushing consumer products, Lab126 has halted ambitious projects that included a large-screen tablet and a stripped-down Fire smartphone, without the 3D screen and eye-tracking cameras.
It's unclear how many engineers were fired out of the 3,000 employees. Amazon wisely requires workers to sign nondisclosure agreements in exchange for severance payments, sources said.
What we know from sources is that the roles at Lab126 are constantly shifting. The workplace is turbulent and the roles are ill-defined, sources added, leading some workers to find jobs at other technology companies.
Lab126 was founded in 2004. It launched the first Kindle e-reader in 2007. A dozen consumer devices followed, including the series of Fire tablets, which were warmly accepted. But Amazon's ambitious projects and its tendency to create products that sell you more stuff are putting people off.
Amazon CEO Jeff Bezos introduced the Fire phone at a flashy event last year. Unfortunately, the gimmicky features and the premium pricing caused it to flop. Some engineers said that it was Mr. Bezos who insisted on the 3D screen and facial recognition cameras, which were both expensive.
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Other projects that have been discontinued include a smart stylus called Nitro, a projector named Shimmer, and a 14-inched tablet dubbed Project Cairo. Only a few projects are left in the lab, including a computer for the kitchen, which doubles as a hub for smart devices.
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Source: Wall Street Journal