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% of its workforce, according to a report. blog post on company website. Prime Video and Amazon MGM Studios will cut hundreds of jobs, an email sent to staff Wednesday said.
Since the end of 2022, Amazon has laid off 27,000 workers as the company cut costs in an effort to recover from overexpansion during the pandemic.
“It is important that we prioritize our investments for the long-term success of our business, while relentlessly focusing on what matters most to our customers,” wrote Mike Hopkins, senior vice president of Prime Video and Amazon MGM Studios, in the email. . He said the company would shift its investments to focus on higher-impact products and cut others.
Amazon’s job cuts signal a worrying trend for tech companies, which laid off tens of thousands of employees last year in response to tough economic conditions and changes in spending habits as people returned to daily life following the pandemic. Xerox announced this month that it would cut 15 percent of its 23,000 employees, and video game software provider Unity Software said it would cut 1,800 positions, or 25 percent of its workforce.
Amazon said the layoffs represented a relatively small percentage of people in the division, although it declined to provide figures. Twitch declined to comment beyond the blog post.
Amazon has been working 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 bundle, which charges an annual fee for fast shipping and other benefits.
It also acquired Twitch, popular with gamers who stream their video games online, for about $1 billion a decade ago. Last year, the company laid off 400 people as part of overall reductions at Amazon, and in December, Twitch announced it would shut down its services in South Korea by the end of February, citing “prohibitive” costs. .
“Unfortunately, despite these efforts, it has become clear that our organization is still much larger than necessary given the size of our company,” Twitch CEO Dan Clancy wrote in the blog. He added that the decision “is necessary to ensure that we can continue to serve our streamers in a sustainable manner 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 firm.
“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 Alex Boccanfuso, research analyst at Gabelli Funds.