Amazon tried to get into the smartphone market last year and failed horrendously. Now, the company is cutting back on those efforts by laying off employees from its Silicon Valley-based Lab126, a secretive wing of the online retailer that focuses on developing hardware devices.
The Seattle-based tech giant has been laying off numerous engineers who worked on the failed Amazon Fire phone, the Wall Street Journal said Wednesday. It's unclear how many people have been fired, but Lab126 has a workforce of about 3,000 employees. Amazon declined comment.
This is the first time in Lab126's 11-year history that layoffs occur, and they appear to signal that the division is going through somewhat of a transition. Besides pulling back smartphone efforts, Amazon has also combined two of its hardware units and scaled back and halted other projects, including a large-screen tablet, the Journal said.
The long-awaited Fire phone made its debut in 2014, going on sale for $200 with a two-year contract exclusively available from AT&T. The device, which featured facial-recognition features that didn't quite have any real purposes, failed to wow consumers and never sold well. It's price was quickly reduced to $0.99 with the AT&T contract.
Amazon cut the price of the phone once again on Wednesday, bringing it to $130 without a contract, down from its original non-contract price of $650. Since the device includes a year-long subscription to Amazon Prime worth $99, Amazon is essentially selling the gizmo for $30.
News of the Lab126 layoffs come shortly after a New York Times expose that described a grueling work culture at Amazon where employees sabotage their colleagues, work around the clock and cry in the middle of the office.