Amazon is laying off hundreds of employees in its studio division, as well as its Twitch subsidiary, to cut costs, the latest in a wave of new job cuts hitting the tech industry.
Twitch, a video streaming platform, will cut just over 500 positions, or 35 percent of its workforce, according to a blog post on company website. Prime Video and Amazon MGM Studios will cut hundreds of jobs, according to an email sent to staff Wednesday.
Since the end of 2022, Amazon has laid off 27,000 workers as the company has cut costs in an effort to recover from overexpansion during the pandemic.
“It's important that we prioritize our investments for the long-term success of our business, while relentlessly focusing on what we know is most important to our customers,” Mike Hopkins, senior vice president of Prime Video and Amazon MGM, wrote in the email. Studios. . He said the company would shift its investments to focus on the most impactful products and cut others.
Amazon's cuts signal a worrying trend for technology companies, which laid off tens of thousands of employees last year in response to difficult economic conditions and changes in consumer habits as people returned to life. everyday after the pandemic. Xerox said this month it would cut 15 percent of its 23,000-person staff, and video game software provider Unity Software said it would cut 1,800 positions, or 25 percent of its workforce.
Amazon said the layoffs constituted a relatively small percentage of people in the division, although it declined to provide numbers. Twitch declined to comment beyond the blog post.
Amazon has worked to build its streaming platform for years, including acquiring MGM Studio in 2022 for $8.5 billion. The company considers streaming an important part of its Prime offering package, which charges an annual fee for fast shipping and other benefits.
It also acquired Twitch, which is popular with gamers who stream their videos online, for about $1 billion a decade ago. Last year, the company laid off 400 people as part of overall cuts at Amazon, and in December Twitch announced it would shut down its services in South Korea at the end of February, citing “prohibitively expensive” costs.
“Unfortunately, despite these efforts, it has become clear that our organization remains significantly larger than necessary given the size of our business,” Twitch CEO Dan Clancy wrote in the blog post. He added that the decision “is necessary to ensure we can continue to serve our streamers sustainably without impacting their ability to support their careers on Twitch.”
In 2023, layoffs affected more than 9,000 people in the gaming industry, according to data collected by Gabelli Funds, an investment management company.
“The layoffs were well above historical industry averages and affected employees at some of the largest companies in the industry,” including Epic Games and Microsoft's Xbox, said Alec Boccanfuso, research analyst at Gabelli Funds.
