Amazon's Fire Phone, the logical smartphone extension of its Kindle Fire tablet series, is a dud. A combination of lackluster reviews, carrier semi-exclusivity, and most of all being tied into Amazon's app and service environment have made it more or less a total failure. The company never publishes hard data for its hardware sales, but causal observation and constant discounts (sometimes more than $500 off of the original $650 off-contract price) imply that the product has been a wash.
The Wall Street Journal is reporting that Amazon isn't eager to continue in the phone market. According to the paper, "dozens" of engineers in the Lab126 hardware team have been laid off. The Journal also reports that the entire division is being reorganized, with some in-progress projects like a large-screen tablet (presumably larger than the 8.9-inch Kindle Fire HDX) being cancelled. All that points to a swift exit from the phone business, reported by "people familiar with the matter."
The Journal cites unnamed sources and Amazon has been predictably mute on the story, but it seems natural that the company would devote its resources to more proven lines like the Kindle e-reader and Fire TV. The company is still trying out new things (the Echo and Dash Button hardware being notable examples), but it looks like the smartphone market is simply too hot for Amazon.... at least for the moment.