Amazon is laying off "dozens" of employees at Lab126, the hardware-development center in Silicon Valley responsible for products like the Fire Phone, according to a report by The Wall Street Journal. Sources at Amazon "familiar with the matter" told the WSJ that the company has scaled back or halted numerous development projects, including a large-screen tablet and a smart stylus.

The WSJ's sources claim that the layoffs form part of a broad reorganisation at Lab126, which began last year after disappointing sales of the Fire Phone. This resulted in Lab126 combining its tablet, e-reader, and phone projects. In October 2014, it emerged that Amazon was sitting on over $83 million (~£54 million) of unsold Fire phones, which the company swiftly tried to shift by offering a substantial price drop.

It's not yet clear whether Amazon will continue its in-house smartphone development. Some engineers at Lab126 told the WSJ that development would be shelved, while another claimed it had been shifted to Seattle under Steve Kessel, an executive who helped spearhead the company's hardware unit and oversaw digital media like e-books and music.

Other workers claimed that shifting priorities at Lab126 led to a "frenetic workplace" and "ill-defined roles," resulting in employees taking jobs at other tech firms. Aside from the Fire Phone, other products developed at the division include the Kindle e-reader, Fire TV set-top-box, and most recently the $180 (~£120) Echo virtual assistant.

Other products claimed to have been development but now shelved include: a stripped-down Fire phone; a smart stylus called Nitro, which translates notes into digital shopping lists; a projector called Shimmer; and a 14-inch tablet codenamed Project Cairo.

Reportedly still in development is a high-end computer for the kitchen, called Kabinet (yes really), which is designed to take voice commands and order items from Amazon.com. A tablet with glasses-free 3D, as well as a Kindle battery that could last up to two years on a single charge, are also supposedly still in development.

The WSJ's report follows a New York Times piece earlier this month, which featured a damning critique of Amazon's corporate culture and employee policies. CEO Jeff Bezos later sent an all-hands e-mail to his company, saying that "the article doesn't describe the Amazon I know or the caring Amazonians I work with every day."

Yesterday, Amazon launched Amazon Underground, an app that offered free games and in-app purchases to users, while paying developers 8p (12 cents) an hour for their efforts.