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firephoneReports have surfaced once again that Amazon’s secretive 3,000-person R&D outfit based in Silicon Valley is undergoing drastic changes in the wake of the failed Fire Phone release.

This time, The Wall Street Journal reports “dozens” of Fire Phone engineers have been laid off at the so-called Lab126, though the Journal couldn’t nail down the exact number of affected workers.

The group also is reportedly slowing down development of some of its most ambitious projects, like a large-screen tablet. The company had once planned a less feature-packed version of the phone, but that project has been postponed indefinitely, according to the WSJ.

Sources for that story say morale at Lab126 took a hit after spending years developing the Fire Phone, only to watch it fail almost immediately. The phone debuted at $200, but within months the price was dropped to 99 cents with a wireless contract. For many, that still wasn’t enough to make it an appealing option.

Amazon fire phoneIn October, Amazon cut its losses with a $170 million-write down mostly attributed to the failed launch.

Some sources told the WSJ they were informed earlier this year that Amazon was putting phone development on hold, while one person said the company was moving the work to the company’s headquarters in Seattle.

This comes after reports in January that several executives had left the hardware group in a major shakeup aimed at making the organization less bloated. On Monday, Amazon’s CTO in charge of devices left for a post at Google, after less than six months in the job.

Amazon certainly isn’t known to shy away from ambitious projects, even in the face of overwhelming odds. But when it comes to the Fire Phone, it’s starting to look like the company may have learned its lesson.

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