Amazon is rethinking its hardware ambitions because of the Fire Phone

No matter how hard Amazon tried, and it tried REALLY hard, the Fire Phone was failure by every definition of the word. Four years of development went to waste when the company struggled just to sell its initial batch of Fire Phones, and Amazon has already lost millions of dollar because of the smartphone. Unsurprisingly, the company has decided to lay off dozens of engineers at its hardware unit in California and will be focusing on things that it knows are successful, like its Kindle tablets and smarthome products. 

Amazon.com Inc. flamed out with critics and consumers last year in its first attempt at a smartphone. Now, rather than forge ahead, as it has with other projects, such as its Kindle tablets, the online retailer is retrenching. In recent weeks Amazon has dismissed dozens of engineers who worked on its Fire phone at Lab126, its secretive hardware-development center in Silicon Valley, according to people familiar with the matter. The layoffs were the first in the division’s 11-year history, these people said. But the precise toll on its roughly 3,000-person staff couldn’t be learned, in part because Amazon typically requires employees to sign a nondisclosure agreement in exchange for severance payments. The company also has scaled back or halted some of Lab126’s more ambitious projects—including a large-screen tablet—and reorganized the division, combining two hardware units there into one, people familiar with the matter said. Amazon declined to comment for this article.