Technologies
Amazon’s Big Year of Thinking Small
Amazon built like our pandemic-fueled shopping spree would never end. Now it has, and the company’s shrinking.
We all came out of the last three years changed. Amazon is no different.
All that online shopping you did during the pandemic added to soaring demand, which combined with other economic forces to push prices higher. Costs got too high for the tech industry, too, driving companies to shrink their ambitions – even the gargantuan Amazon.
Amazon was already the Goliath of US e-commerce before the pandemic, representing more than 40% of the market, according to Statista. With the boom in online shopping, fueled first by lockdowns and then by stimulus cash, the company’s profits shot up for more than a year.
Then came the bust. Amazon’s growth stalled out in the middle of 2021, and it posted its first loss in seven years at the beginning of 2022. By November, Amazon was the first company in the world to lose $1 trillion dollars in value, Bloomberg reported.
The problem wasn’t just that we stopped shopping through our misery. Amazon, like a lot of tech companies, banked big time on our new buying behaviors. As we went back to brick-and-mortar stores and cut our spending this year, the company was left with an oversized workforce and a hulking logistics network it couldn’t support. This year, Amazon and its competitors scrapped large chunks of what they built during the pandemic.
For you, Amazon’s new frugality means its advancements on flashy new gadgets — or the inexpensive ones you use to set timers, create reminders and check the weather — may get less of the company’s devotion next year.
Amazon’s most visible sign of retreat was the planned layoffs, which the company has confirmed will happen without giving the number of employees it plans to cut. Estimates in new reports range from 10,000 to 20,000 people who will lose their Amazon jobs in the coming months, but that’s just the most recent glimpse of trouble. Amazon began telling investors in October 2021 that it had built up its warehousing and air freight capacity too much in response to early pandemic demand.
The middle of this year started to reveal casualties elsewhere in the company. Amazon shut down its physical bookstores and some Amazon Go convenience store locations. It jettisoned its Amazon Care health care service on doubts it would ever be profitable. And departments in charge of customer favorites like Alexa-powered devices took a disproportionate hit from the layoffs so far.
Amazon declined to provide a comment for this story but directed CNET to remarks Amazon CEO Andy Jassy made during the New York Times DealBook Conference. Jassy said then that Amazon wasn’t done making bets on businesses that could have long-term payoffs.
«What we’re trying to do is streamline our costs in a bunch of different areas, while at the same time making sure that we keep betting on the things that we believe long-term could change,» Jassy said.
Still, this year’s cuts at Amazon reflect a turn toward immediate profitability, said Neil Saunders, a retail analyst at GlobalData, noting that the company hasn’t found a way to profit from Alexa devices.
It’s a sign of an industry-wide reckoning with shoppers hitting the brakes on spending, Saunders said, adding, «A lot of companies behaved as if it was a permanent shift.»
Peaks and valleys
E-commerce hit startling heights in 2020. Shoppers dropped earnings and stimulus cash on home furnishings, gardening supplies and electronics, and growth of online shopping was remarkable. It shot up from a steady growth rate of around 16% at the end of 2019 to more than 44% in the summer months of 2020.
E-commerce is still growing today, but the frenzy is over.
But while spending was still at unprecedented levels, Amazon used the extra cash to feverishly build warehouses and air hubs. It doubled its ranks from just under 800,000 employees at the end of 2019 to more than 1.6 million by the end of 2021. And it wasn’t just Amazon. Shopify, the company behind many standalone online shops, also went on a hiring spree. Social media companies like Meta and Twitter benefited too, bringing in extra advertising revenue from merchants who aimed targeted ads at shoppers sitting at home.
Figures from the US Census Bureau show e-commerce spending is now where it would be if it had just kept growing at the same steady clip that it was before the pandemic. Even though the feverish buying started to cool last year, a few tech chiefs have said they thought the shift to online shopping was permanent. It wasn’t.
«Those chickens are coming home to roost,» Saunders said.
When Meta announced layoffs of 11,000 employees in November, CEO Mark Zuckerberg conceded it was a mistake to assume increased revenues would endure. Shopify cut 10% of its workforce in July, with CEO Tobi Lutke saying he was wrong to predict a permanent leap ahead of five to ten years in the growth rate of online shopping.
Amazon’s layoffs will also be significant. Proportionally, they’re on track to represent the company’s biggest workforce reduction since the 2001 dot-com bust, which hit 15% of its staff, according to the New York Times. Nonetheless, Jassy said Amazon made the right decision to scale up rapidly starting in 2020, adding that it was better to get too big than to stay too constrained to meet demand from shoppers and from sellers who use the company’s marketplace.
The slowdown shouldn’t have caught the heavyweights of e-commerce by surprise, said Andrew Lipsman, a retail analyst at Insider Intelligence. We were going to regain access to in-person stores at some point, and stimulus payments weren’t going to last forever. But even if cash-flush tech companies knew there would be an inevitable bust, they couldn’t let the opportunity to scale up and capture all our shopping dollars pass them by.
«They tend to think of it as an arms race,» Lipsman said. «When their major competitor is investing heavily, they don’t want to be the ones not doing it.»
Slowing innovation
That bitter downswing has forced Amazon to pull back on some of its flashy pet projects, like Alexa, where a large portion of the layoffs took place. While Alexa-powered devices like Echo smart speakers and displays dominate the smart home market, they’re priced to lose money. And even though Alexa made huge advances in voice recognition and AI-generated speech, the technology hasn’t succeeded in getting people to shop by voice, analysts say.
Amazon’s health care initiatives are also seeing cutbacks. The company said Amazon Care, a service that offered telehealth and in-home medical appointments, would close down at the end of 2022. (Amazon says it’s pushing forward with its purchase of One Medical, which offers primary care clinics and telehealth services).
Also on the chopping block were Amazon’s brick-and-mortar bookstores and its remaining «Four-star Stores,» which analysts say never found a purpose.
Amazon hasn’t killed the Alexa division or its health care efforts entirely, and Jassy has said the company is still betting on innovations like autonomous vehicles with its Zoox business. But the moves show Amazon is unwilling to sink quite as much money into services just for the sake of destabilizing or owning a market. That’s a contrast to its earliest approaches with selling books and music online, which Amazon pursued while taking a loss for seven years before finally turning a profit in 2001, said Sucharita Kodali, a retail analyst with Forrester.
«The DNA of Amazon was, ‘we’re going to lose money,'» Kodali said. Now the company must invest in things that’ll pay off sooner rather than later, she added.
And just like everything about Amazon, when the company cuts back, it does it in a big way.
Technologies
This Duck-Billed Microphone Protects Against Eavesdroppers, But It Sure Is a Look
At CES 2026, this privacy accessory drastically quiets your conversations, though if you use it in public, you’ll surely raise questions.
Ever wanted to have a phone conversation without others listening in? At CES 2026, I saw a solution to this privacy problem, the Mutalk 2, a wearable microphone that muted my voice from people around me. It also made me look like a cyberpunk platypus.
Coming from Japanese company Shiftall, the Mutalk 2 is a $200 accessory that you wear over your mouth and nose, sealed by a rubber gasket, with a plastic oval extending out for a few inches. It connects to phones or devices over Bluetooth or wired 3.5mm jack. In a demonstration, I wore the Mutalk and chatted over the phone with someone 10 feet away who could hear me clearly on the call, but could pick up only the barest mumbling otherwise.
There’s no getting around the Mutalk’s strangeness, and I would expect to raise eyebrows if I ever wore it in public, as strapping one on made me look like I was wearing a gas mask. To be fair to Shiftall, I don’t have the design chops to suggest a better look for a microphone that incorporates tech to muffle my voice. Granted, I could imagine plenty of reasons to use it in the comfort of one’s own home, like to chat with online friends while gaming late at night without worry of waking up roommates, partners or babies.
From my brief time with the Mutalk 2, it appears to work as intended, and $200 isn’t prohibitive compared to the prices of other microphones. While it undeniably looks odd, its design is more functional than exotic. After I adjusted its rubber straps that went around my head, the accessory sat comfortably enough on my face, and was light enough that it wouldn’t seem to drag down during a longer conversation. The rubber gasket that covers the mouth and nose is removable, making it easy to clean.
If you want private conversations while you’re out in public, there may be less obtrusive ways to go about it than the Mutalk 2, like a throat microphone. But Shiftall’s design has other benefits, such as blocking lip-reading. And it’s worth pointing out that some people out there would love to rock that cyberpunk platypus look. I mean, folks did line up to buy the Razer Zephyr RGB mask — some people embrace parts of the bleeding-edge technological future that’re different from anything else around.
Technologies
Cloudflare Says Winter Olympics Cybersecurity Is at Risk in Spat With Italian Regulators
But Cloudflare’s global head of policy tells CNET the company is open to an agreement with Italy.
The CEO of the networking company Cloudflare is lashing out at Italy in response to regulatory anti-piracy fines, threatening to withdraw from the country and potentially the 2026 Winter Olympics.
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Italy announced on Jan. 8 that it had issued a fine of 14.2 million euros (approximately $16.5 million) against Cloudflare for failing to block access to pirated content. Soon after that, Cloudflare’s CEO Matthew Prince took to X to call out the fines, describing Cloudflare’s decision not to comply as a fight over censorship. Prince said that complying with Italy’s demands under its Piracy Shield policies would affect content globally.
Italy’s Piracy Shield is a program implemented by the country’s telecommunications regulator, AGCOM. In order to cut down on piracy in the country, such as hosting illegal streams of sporting events, the program allows IP holders to report content violations to a rapid-response automated system. However, some have complained that the 30-minute window given is not enough time for ISPs to properly vet complains, and is resulting in legitimate, non-pirated content being blocked as well.
«In other words, Italy insists a shadowy, European media cabal should be able to dictate what is and is not allowed online,» Prince said.
Yesterday a quasi-judicial body in Italy fined @Cloudflare $17 million for failing to go along with their scheme to censor the Internet. The scheme, which even the EU has called concerning, required us within a mere 30 minutes of notification to fully censor from the Internet any… pic.twitter.com/qZf9UKEAY5
— Matthew Prince 🌥 (@eastdakota) January 9, 2026
In his posts, Prince specifically mentioned the 30-minute timeframe that Italy requires for Cloudflare to disable access to suspected piracy traffic.
«We block pirate streams every time we find one,» he wrote. «We hate them.» But, he said, «we can’t put in place a system where a shadowy cabal can require us to remove GLOBALLY anything they don’t like on the internet within 30 minutes. That’s insane.»
Some of the proponents of Italy’s piracy rules are soccer teams that want to prevent the illegal streaming of their matches.
Prince went on to list steps his company might take, including pulling its cybersecurity service from the 2026 Milano Cortina Winter Olympics, removing Cloudflare servers from Italian cities and holding off on any plans to invest in the country. Prince also suggested he would get US government leaders involved, tagging Vice President JD Vance in his post. Prince also reposted a message addressed to the Italian prime minister, along with an article about Italy’s actions.
The Winter Olympics, scheduled to take place between Feb. 6 and Feb. 22 at sites across Lombardy and Northeast Italy, are a sensitive subject when it comes to cybersecurity, considering the potential that many may use VPN technology to view broadcasts of the event.
Door is open to an agreement, Cloudflare says
In an interview with CNET, a Cloudflare representative said that while the fine from Italy represents more than the company’s total revenue from the country, Cloudflare is still open to an agreement to avoid saying arrivederci to the country.
«We’re still evaluating, and we’re still open to working something out,» said Alyssa Starzak, Cloudflare’s deputy chief legal officer and global head of policy. «That would be a better solution. The hope is we can have some discussions for a more reasonable result.»
Starzak said the company has posted information and conducted outreach to Italian stakeholders about the ways Cloudflare is working to combat unauthorized streaming. But Italy’s law, she said, leaves no room for negotiation or nuance.
«It’s been very much a ‘You must do what we say’ » situation, she said.
Technologies
Transport Your Dungeons & Dragons Hero Off the Page With This Tabletop Gadget
At CES 2026, I found a couple ways that players and dungeon masters can use tech to upgrade their gameplaying experience.
As I walked around CES 2026, my eyes drifted over a poster awash with fantasy heroes, dastardly monsters and rolling dice — and I failed my saving throw to look away. If you’re a fellow tabletop gaming nerd, you might want to follow this pair of gadgets due out later this year.
Tabletop gaming continues to appeal to players with its deliberately analog gameplay, using miniatures, maps, dice and other physical trinkets to keep the focus on real-world play. The niche has grown in popularity over the decades, and a supporting industry has risen around it, offering third-party materials and accessories to enhance the experience. Digital gadgets and software have been added to this mix in recent years, and a new company, Arcalink, has its own supporting products for the avid Dungeons & Dragons player.
The first of Arcalink’s upcoming tabletop augmentations is a gadget that’s small but mighty. About the size of a film canister, the Arcalink One is a rectangular display around 2 to 3 inches long that’s covered in fantasy decorations. These can be swapped out, with one looking like a doorway in stone ruins and another appearing like a blue wizard’s portal (a third, not present but described to me, would look like a Mimic, the classic D&D monster that appears as a treasure chest to trick adventurers).
The Arcalink One’s screen shows a player’s avatar, and since it was built with the fantasy roleplaying game D&D in mind, animations for popular spells that can be triggered by voice commands. Tabletop RPGs encourage the theater of the mind, with players envisioning their characters through vocal descriptions, but the Arcalink One seems like a neat way for them to accessorize with a digital version of their hero (uploaded in JPG or MP4 file formats) that’s neither essential to play nor large enough to be obtrusive — a totemic treat to take from one game to another, swapping out character portraits by using the paired app.
The basilisk in the room is the price tag: the Arcalink One is expected to cost between $100 and $150, Arcalink founder Lizheng Liu told me. While the company hasn’t hashed out the final numbers, that first number is the device itself, and the high end of the range will bundle more of those clip-on decorations along with it.
Over $100 for an optional device is prohibitive for most tabletop players, but I imagine this would appeal to adventurers with deeper pockets who want a neat little plug-and-play gadget to bring more flair to the game table. Also, let’s not pretend tabletop fans aren’t already spending a good amount of money on accessories, dice and miniatures (looking at you, wargamers).
The company plans to let a select group of supporters start backing the Arcalink One in March or April, with a full Kickstarter crowdfunding campaign launching around June.
The second product, Arca Studio, is entirely digital: AI-powered software to help dungeon masters, the thankless gameplay managers who tell the story and give voice to their world’s denizens for their characters to experience. No, it’s not using generative AI to spit out campaign ideas — this AI software records your game sessions and will make it easy to go back and search for characters and plot events while planning ahead of your next game day.
Yes, this is a sort of gaming version of the AI summaries that productivity apps offer when, say, you’ve finished a video chat, but there are a few unique features tailored to tabletop gaming. One makes a word cloud grouping together recurring names and concepts in your campaign recordings to visualize the themes and frequent elements — great for dungeon masters to see which plot lines and adventure types they might be overusing to switch them up.
Arca Studio will launch around May or June and will be a subscription service, though Arcalink hasn’t decided on an expected monthly cost yet. It’s worth pointing out that anything could change in pricing or product features before these two products reach the market — and just like a good tabletop campaign, there might be some last-minute twists that change everything.
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