Microsoft

Big Tech is shutting down devices amid economic woes

Illustration of technology's trust gap

Illustration: Aïda Amer/Axios

Tech giants are scrapping several consumer equipment product lines as dark economic forecasts make cost cutting a priority.

The big picture: Tech’s biggest bear market in two decades has led to tens of thousands of layoffs and plummeting stock prices as companies try to find ways to minimize the long-term impact of the downturn.

What is going on: Amazon’s reported plan to lay off about 10,000 employees, according to the New York Times, focuses most of the cuts on the retail giant’s device organization, which has “Kindle, Alexa, Fire tablets, Fire TV, Echo, Astro, Ring, Blink , Halo and Luna,” according to an Amazon job site.

At meta, last week, executives said the giant was shutting down its Portal smart display platform and smartwatch projects.

Google canceled its next Pixelbook laptop in September, sinking the team building it.

Of interest: The trimmed devices are outside of each company’s core or flagship business, meaning the companies are scaling back some of their efforts to find growth in new markets.

In the meantime, other major technology platforms are similarly pulling out of some device projects.

The intrigue: The two oldest companies in the Big Tech club, Apple and Microsoft, have not yet announced device cuts and continue to update existing lines.

  • Apple’s incremental rollout of device upgrades continued like clockwork through 2022, during which time the company also released the high-end Apple Watch Ultra.
  • At last month’s Surface event, Microsoft announced an updated Surface laptop, Surface Studio, and a Surface tablet.

Amazon and Meta chased new devices, in part hoping to build new platforms beyond the reach of Apple and Google, which dominate the smartphone world.

  • But neither has managed to expand these new device categories beyond niche audiences.

With Meta’s push to build the metaverse, it leaned more than ever before towards a hardware company.

Yes but: The video game industry is still exploring additional consumer devices beyond core consoles.

  • Sony expects to release its PlayStation VR 2 in February, which will cost more than the PlayStation 5 required to run it.
  • Valve has continued to expand its niche Steam Deck handheld device, released earlier this year, with a docking peripheral.

Our Thought Bubble: Cutting back on devices is all about tightening the belt, but they may also reflect a saturated gadget market that was too late to do some culling.

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