Amazon Faces $25 Billion Loss from Alexa Devices, Plans Paid Tier to Revamp Strategy

Despite strong sales, Amazon's Alexa-enabled devices have incurred significant losses, prompting a shift towards monetizing the voice assistant with a subscription model.

Amazon's devices division lost over $25 billion from 2017 to 2021, largely due to low-profit margins on Alexa-enabled products.
CEO Andy Jassy is steering the company away from founder Jeff Bezos' 'downstream impact' strategy, which relied on indirect revenue from device usage.
A new paid tier of Alexa, featuring generative AI for enhanced conversational capabilities, is set to launch soon, despite internal skepticism about its success.
The company's focus is shifting towards creating value through service usage rather than just device sales.
Amazon has laid off thousands of employees in the devices division as part of cost-cutting measures.