​Burnt once, Amazon lays off engineers behind the Fire phone

Amazon is scaling back and cutting projects at its secretive hardware development group Lab126.

Amazon's top secret Lab126, the group responsible for Amazon's failed Fire smartphone and other consumer hardware, is facing job cuts.

According to the Wall Street Journal, Amazon has retrenched dozens of engineers at Lab126 that worked on the Fire, and killed off or scaled back a number of other hardware projects that were under development.

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Though it's still unclear whether Amazon will take a second crack at the smartphone business, Lab126 probably won't be behind the effort if it does, according to the report.

According to the WSJ, the layoffs are the first in the 11-year history of Lab126, which is located in Sunnyvale, California, some distance from Amazon's headquarters in Seattle.

The group is responsible for a number of established products such as the Kindle e-reader, as well as consumer devices like its new $180 smart home device and virtual assistant, Echo. It's also behind more experimental hardware that helps plug consumers into Amazon.com, such as the Echo bar code scanner and the experimental Dash Buttons for Amazon Prime customers.

But with the current reorganisation of Lab126, several products being developed there may now never see the light of day, among them a smart stylus, codenamed Nitro, that translates a user's scribblings into digital shopping lists. There's also Shimmer, a device that projects images on walls and other surfaces, and a 14-inch tablet internally known as Project Cairo.

Amazon CEO Jeff Bezos unveiled the Fire phone in June 2014, hoping to one-up Apple's iPhone with a device just for Amazon Prime customers - but with $200 on-contract pricing and a few other missteps, interest fizzled out quickly. Within three months Amazon took a $170m charge on the device and was left with $83m in inventory, which it's been clearing out with fire sale prices ever since.

As noted by WSJ, the reaction that the device was too expensive surprised some at Lab126, given that the deal included a free year of Amazon Prime shipping, which normally costs $99.

Some Lab126 engineers told the paper that they were disappointed that the company's hardware seemed to be focused on driving customers to purchase more from amazon.com, though the rationale for that is that Bezos isn't seeking a profit from the devices themselves, but instead to make money on goods purchased through them.

It's not all over for Lab126, which is still forging ahead with a high-end computer for the kitchen dubbed Kabinet, another smart home device that takes voice commands for ordering things from amazon.com. It's also working on a battery for the Kindle e-reader which could last two years on a single charge rather than the current six to eight weeks.

The turbulence at Lab126 has also caused a high turnover rate at the unit, sources told WSJ, which noted the recent loss of engineer Jon McCormack to Google.

ZDNet has asked Amazon for comment and will update the story if any is forthcoming.

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