It’s not yet clear how many people were axed since they must sign non-disclosure agreements in order to get severance, but the division employs around 3,000 workers, according to reports. The company has consolidated Lab126's phone arm with its tablet and e-reader division, which also contributed to the job cuts.
According to reports, Amazon has reportedly scaled back or discontinued numerous projects at the secretive hardware development shop. This includes a 14-inch tablet the company was working on named Project Cairo, a projector codenamed Shimmer and a smart stylus for converting handwriting into digital lists called Nitro.
The Amazon Fire Phone, priced at $650 was a huge commercial failure when it launched in July last year. The phone sold just 35,000 units in its first 3 months. In October2014, it emerged that Amazon was taking $83 million write-down on unsold inventory of the phones, which the company swiftly tried to shift by offering a substantial price drop. Amazons layoffs form part of a broad reorganisation at Lab126, which began last year.
Beginning this year, Amazon’s hardware division went through a major restructuring that saw many top executives leave the group. Similar to this layoff, the changes were attributed to the Fire Phone failure.
It is still not clear whether Amazon will continue its in-house smartphone development. Other projects that the Silicon Valley-based Lab126 are supposedly still working on include a high-end computer for the kitchen – code named Kabinet, built to serve as a home internet hub and is competent of taking voice commands, a 3D-enabled tablet that will apparently make pictures pop off the screen without the need for special glasses as well as a Kindle battery that could last up to two years on a single charge.
Lab126 isn’t dedicated to the Fire Phone alone. Apart from the Fire Phone, other products developed at the division include the successful Kindle e-reader and Kindle Fire tablets to the video-streaming Fire TV and Fire TV Stick set-top boxes, smart home-type devices like the Amazon Echo, Dash buttons and most recently the Echo Virtual assistant. Similar to the Fire Phone, all devices have been designed to make it more convenient for buyers to purchase either physical or digital products from Amazon.