The failure of the Amazon smartphone to set the world on fire has triggered an unprecedented round of job cuts at the company’s obscure Lab126 division.
Dozens of engineers have been let go at the Silicon Valley-based division, according to The Wall Street Journal, which said it was the first time that Amazon had cut staff at Lab126.
A management reshuffle after the smartphone flop this year suggested that changes were afoot at the division, which is also responsible for making the Kindle e-reader and the Fire tablet.
The Amazon Fire phone was launched in June last year, boasting four front-facing cameras that promised to create a 3D-like experience.
Amazon hoped that it could repeat the success of the Kindle and the Fire tablet, but the Android-based handset failed badly within months and the online retailer cut the price by two thirds. It wrote off $170 million on unsold smartphones within months.
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Jeff Bezos, the Amazon founder, was understood to be sanguine about the failure of the phone, having written it off as a learning experience.
Turnover at Lab126 has been high since the flop after a reorganisation folded the phone division into the tablet and e-reader teams.
Lab126 had rapidly grown from an experimental “skunkworks” centre, employing 100 people, to a significant part of Amazon’s business. It now employs 3,000 staff, and the job cuts could be a sign that Amazon is trying to introduce more discipline to the division.
The firings come amid a scandal over Amazon’s workplace culture, with Mr Bezos retaliating after a report in The New York Times detailed anecdotes that painted a picture of a “bruising” experience for the Seattle-based company’s employees.
Mr Bezos said that he did not recognise the “soulless, dystopian workplace” described in the article.
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The report in The Wall Street Journal suggested that Lab126 suffered from “shifting and, at times, enigmatic priorities” that created a frenetic workplace with ill-defined roles.
It produced numerous devices last year, including a voice-activated personal assistant called The Echo, a button called The Dash that allows users to order items such as washing powder or nappies, and a television set-top box.
The report also suggested that Amazon had been working on a high-end computer for the kitchen.
Amazon declined to comment.