Fire Phone flop blamed for layoffs and reorganization at Amazon

Amazon is laying off "dozens" of employees at Lab126, the hardware-development center in Silicon Valley responsible for products like the Fire Phone, according to a report by the Wall Street Journal. Sources at Amazon "familiar with the matter" told the WSJ that the company has scaled back or halted numerous development projects, including a large-screen tablet, and a smart stylus.

The WSJ's sources claim that the layoffs form part of a broad reorganisation at Lab126, which began last year after disappointing sales of the Fire Phone. This resulted in Lab126 combining its tablet, e-reader, and phone projects. In October 2014, it emerged that Amazon was sitting on over $83 million (~£54 million) of unsold Fire phones, which the company swiftly tried to shift by offering a substantial price drop.

It's not yet clear whether Amazon will continue its in-house smartphone development. Some engineers at Lab126 told the WSJ that development would be shelved, while another claimed it had been shifted to Seattle under Steve Kessel, an executive who helped spearhead the company's hardware unit, and oversaw digital media like e-books and music.