Amazon Chief Executive Andy Jassy is leading a cost-cutting review, with Amazon Alexa executives whose division is struggling to make a profit being asked to explain.

Amazon’s devices unit, which includes Alexa, had an operating loss of more than $5 billion a year, with the real possibility emerging that heads could roll, and layoffs happen including in Australia.

The issue for Amazon management is whether to invest more in the struggling division that sells products at JB Hi Fi, The Good Guys and Harvey Norman or swing the axe on the loss-making division.

One option is to add new capabilities to Alexa, the Companies voice assistant which is struggling to get traction in Australia up against Google.

Adding new capabilities would require significant investment with insiders claiming management are looking to “cut costs ‘and not grow losses”.

Amazon also has told employees in certain other unprofitable divisions to look for jobs elsewhere in the company because the teams they were working on were being suspended or closed according to insiders.

At this stage it’s not known whether job cuts have already been made in Australia.

“Our senior leadership team regularly reviews our investment outlook and financial performance, including as part of our annual operating plan review,” an Amazon spokesman said in a statement overnight.

“As part of this year’s review, we’re of course taking into account the current macro-environment and considering opportunities to optimize costs.”

Amazon’s shares rose by more than 4% on Thursday immediately after The Wall Street Journal published news about the cost-cutting review.

The stock was up by more than 13% around midday after the cost cutting program was revealed.

This year Amazon stock has fallen close to 45% year to date due to a slowdown in its core retail business.

Between the end of 2019 and end of 2021, Amazon hired more than 800,000 employees, mostly at its hundreds of warehouses, as it sought to keep up with a surge in online orders. Now the business is looking to introduce more robots to replace human employees.

During the same period Amazon has spent close to $10 billion on acquisitions of a robot device-maker, a movie-and-television studio, and a primary-care healthcare company.

According to the Wall Street Journal Jassy is totally focused on reducing expenses and increasing profits.

This year Amazon has lost $3 billion after posting net income of about $33 billion in 2021 and $21 billion in 2020.

Last month, Jeff Bezos, the Amazon founder who remains the company’s chairman, joined other business leaders in warning about economic uncertainty. “The probabilities in this economy tell you to batten down the hatches,” he tweeted.

Jassy became CEO of Amazon just as a change in consumer behaviour began to affect Amazon’s retail side of the business.

Amazon enjoyed unprecedented growth during the pandemic, and healthy revenue and earnings growth for years before it. But for much of Mr. Jassy’s tenure, he has dealt with slowing growth.