Sandwiched between the rapid-fire series of news reports last week about the FTX collapse and Elon Musk’s Twitter immolation were the layoffs at Amazon, which these days might seem par for the tech industry course. But what was significant about the Amazon cuts wasn’t just the fact that they happened. It was the incidental revelations from various news outlets that the Alexa virtual assistant—where many of the cuts occurred—is losing several billion dollars a year. It’s not often we get a look inside the black box of Amazon’s financial statements. And it raises a question: What else is Amazon losing bucketloads of money on?
The list could be long. In a vaguely worded statement about job cuts last week, CEO Andy Jassy said Alexa is one of several “newer initiatives that we’ve been working on for a number of years and have conviction in pursuing,” also including Prime Video, the Kuiper Systems satellite venture, Zoox self-driving cars and healthcare. Given the costs of building satellites and developing self-driving cars, it’s a good bet Kuiper and Zoox are both soaking up billions of dollars a year. Then there’s Prime Video, the most developed business in that group. Making or licensing video programming is enormously expensive and few streaming firms are yet making money. Prime Video has added to its costs by jumping into live sports, such as Thursday night NFL games, which don’t come cheap. In other words, Prime Video, too, could be a money pit.