Amazon has sent packing “dozens” of engineers who worked on its ill-fated Fire phone, according to the Wall Street Journal. The e-commerce giant is also making other changes to Lab126, its consumer electronics R&D division, including putting the brakes on some of its more lofty hardware objectives.
The Fire phone, which debuted last year to much fanfare, was quickly deemed a flop; within months, Amazon had slashed its price tag from $199 to a mere 99 cents. Still, sales stagnated, and by October, the company had no choice but to take on a $170 million charge due in large part to unsold inventory.
But during a December interview with Business Insider editor-in-chief Henry Blodget, Amazon CEO Jeff Bezos insisted that this was just the first iteration, and that the Fire phone could make its mark once it was reworked. The WSJ now reports that some Lab126 engineers were told “further phone development would be shelved”; another person, however, told the Wall Street Journal that the division was simply moved to Seattle, Amazon’s birthplace.
Earlier this year, Fast Company published a deep dive into what went wrong with the Fire phone. The product’s greatest downfall–aside from Bezos’s dogged insistence on questionable product features like a 3-D screen and facial recognition tech–may have been its pricing, which seemed antithetical to the Amazon ethos:
In late July, the Fire Phone finally went on sale, and it didn’t take long for the company to discover that consumers considered its smartphone effort utterly misguided. Reviewers knocked the device for its gimmicky features, especially Dynamic Perspective, which most found worthless and distracting. They also took issue with the Fire Phone’s bland industrial design and disappointing ecosystem; Amazon simply doesn’t offer the same library of apps or cohesion of services as Apple. But what Amazon got most wrong, they said, was the cost: The Fire Phone was too expensive for its customers…
…”With most of Amazon’s products, I usually get it: I can somehow use these things to buy more shit,” explains a high-profile innovator in the Valley with strong ties to Amazon. “But when Amazon starts to move into selling [high-end consumer electronics] like the Fire Phone, how does the brand do? Amazon is not an aspirational brand. I’ve never heard anyone say, ‘Wow, Amazon is really cool.’ They’re known for notorious e-commerce efficiency, which is about as diametrically opposed to fashionable as you can get.”
Lab126 employees have taken the Fire phone’s failure to heart, the Wall Street Journal writes. And more importantly, it leaves people wondering about Amazon’s future prospects in the consumer electronics space. Some Lab126 employees have opted for jobs at other tech companies, a result of “shifting and, at times, enigmatic priorities” that made their workplace chaotic.
It seems Amazon may finally be cutting its losses. The company has combined Lab126’s phone arm with its tablet and e-reader division, which also contributed to the job cuts: Many employees felt their roles overlapped or were unclear following the restructuring.
[via Wall Street Journal]