Lab126, the Amazon division responsible for the Kindle and Fire Phone, hit with layoffs

Kindle Fire

According to a report from The Wall Street Journal, Lab126, the secretive hardware development division within Amazon that created the disastrous Fire Phone, is undergoing a significant restructuring.

Citing sources familiar with the matter, the publication says that “dozens” of the division’s engineers have been laid off, and that the company has halted development on future Fire Phones. In addition, other projects, including Nitro, a stylus that is able to digitize a person’s handwriting, have been shelved.

The WSJ notes that is the first time in Lab126’s 11 year history that employees have been laid off. Accordingly, division morale is apparently plummeting following the layoffs, with a recent expose on Amazon’s HR practices from the New York Times not helping matters.

Although the Fire Phone never made its way to Canada, many of Lab126 other projects have. In 2007, after several years of development, Amazon released the team’s first project, the Kindle. Since then, other Lab126 products have made their way up north, including the Kindle Fire HD tablet series.

Amazon’s reasoning for the restructuring may seem obvious: after the failure of the Fire Phone, it was forced to write off $170 million in unsold stock. However, its actions may have more to do with a more significant cultural shift happening at its offices.

Traditionally, Amazon has pumped the majority of its revenues into developing new products. For instance, it’s been funnelling money into developing and testing drones right here in our backyard, and it’s that mentality that has helped it become a maverick in the space.

However, at the conclusion of its most recent quarter in July, Amazon recorded a surprise $92 million profit, sending investors in to a purchasing frenzy. The company credited tighter cost control for its profitable turn.

What these layoffs could signify is that we’re looking at a new Amazon that has turned away from its more innovative inclinations.Whether all of its imaginative products come to Canada or not, that’s something that doesn’t bode well for Canadian consumers.

[source]Wall Street Journal[/source]