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I think Amazon has been subsidizing Alexa unit heavily in an attempt to capture 'smart home' and 'personal assistant' market share, since the beginning. Alexa-powered devices like Echo are cheap and probably don't generate much if any profit. And Amazon has a bewildering lineup of these things. They can easily cut that lineup in half.
The value to amazon is in the user data, selling other smart devices (security, 'smart' appliances) and potential to Sell Stuff By Voice. But I don't think demand for those products is growing very robustly except with geekier folks. (Smart TVs are the exception: it's impossible to by a TV that isn't 'smart', whether you like it or not. It's definitely more convenient to search for content via voice, and in some cases, to launch playback of something, but that doesn't need to be very smart.)
I'm a geek myself but don't have much use for 'intelligent assistants' or 'smart home' devices . We went through a phase talking with Echos but the novelty wore off. I never ordered anything from Amazon with a voice command, or had any desire to put one in every room of the house.
We've replaced them with HomePods, but barely talk to them, and have exactly one smart light switch (set up as a timer; I've never asked Siri to turn it on or off).
But AI/ML is a thing worth investing in for its own sake, and has a broad range of potential applications. I don't see Amazon laying off a bunch of their engineers.
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