Amazon’s Silicon Valley-based hardware group has undergone a major restructuring, with several executive leaving the organization over the past few months.
According to Fast Company, which was the first to report the departures, the changes closely follow the release of the Amazon Fire Phone, which was discounted heavily after it failed to gain any traction among consumers.
In light of the flop, Amazon is now reorganizing Lab126, the 3,000-employee R&D group based in Cupertino, Calif. that has been responsible for multiple consumer products, including the Fire Phone, the Fire TV, the Echo speaker and other Kindle hardware.
Amazon did not return emails seeking comment to Fast Company or GeekWire. However, two sources tell GeekWire that list of departures reported is accurate, and that the changes were long overdue.
The changes being made include:
- Malachy Moynihan, Lab126’s VP of digital products, and leader of the Fire TV and Echo projects. He has left to pursue an outside opportunity.
- Ian Freed, Amazon’s VP of devices, who oversaw the marketing of the Fire Phone is now on sabbatical.
- David Foster is now in charge of Lab126’s advanced technologies group, after previously overseeing Kindle products.
- Jon McCormack, Amazon’s VP of Kindle software at Lab126 left in December for Yahoo.
While the departures have to do with mistakes made in launching the Fire Phone, they are also being portrayed as signs of growing pains. As Amazon moved quickly to become a hardware maker, the division became more inefficient and bloated. The reorganization is designed to make it stronger, so Amazon can better take on rivals, like Google and Apple. Fast Company’s cover story goes online tomorrow and will hit newsstands next week.
To be sure, Amazon still has aggressive plans for its hardware division.
In September, Reuters reported that Amazon reached an agreement with the state of California that would give it $1.2 million in tax breaks. In return, Lab126 planned to invest $55 million and boost its full-time payroll to at least 3,757 people by 2019.
Amazon’s CEO Jeff Bezos also continues to support the Fire Phone launch publicly, recently saying: “People love to focus on things that aren’t working. That’s fine, but it’s incredibly hard to get people to take bold bets. And if you push people to take bold bets, there will be experiments … that don’t work.”