Seattle-based company Amazon disclosed this week about a major shake-up resulting in job cuts across its units, Twitch, Prime Video, and Amazon Studios.
Key Takeaways:
• Amazon will be laying off hundreds of workers from Twitch, Prime Video, and Amazon Studios.
• More than 500 Twitch workers will be laid off, constituting approximately 35% of the platform’s staff.
• The company states that the layoffs are a part of restructuring towards more strategic and resource-efficient operations.
• Affected employees are to receive severance, job placement assistance, and other benefits.
Impact on Twitch
CEO Dan Clancy unveiled the news of the layoffs to employees early Wednesday morning. More than 500 Twitch employees, accounting for roughly 35% of the platform’s team, will be affected by the cuts. Clancy defended the company’s decision, stating that Twitch’s current revenue does not suffice the expenses on streamers’ fees and its colossal staff.
“Sizing our organization based on the current scale of our business and future growth predictions is fundamental in the current tech industry landscape,” Clancy explained.
Potential Impact on Prime Video and Amazon Studios
Simultaneously, the Senior Vice President, Mike Hopkins, announced layoffs at Prime Video and Amazon Studios. He did not provide exact figures but described the number as several hundred.
The intention behind this move, according to Hopkins, is to streamline the company’s measures towards sustainable growth. The said layoffs will enable Amazon to sharpen its focus on impactful content and product initiatives.
“Our industry’s rapid evolution necessitates that we prioritize long-term investments for our business success, while staying focused on our customers’ top priorities,” stated Hopkins.
Ensuring the Welfare of the Laid-off Employees
All affected employees, as per Hopkins, will receive severance, job placement assistance, and other benefits to support them during the transition.
Amazon’s Move Involving Prime Video
These layoffs follow Amazon’s acquisition of MGM Studios and its library, inclusive of the ‘Rocky’ and James Bond franchises, for approximately $9 billion, over a year ago.
In addition to this, Prime Video currently holds an influential streaming contract with the National Football League. The service also boasts expensive productions, such as the “Lord of The Rings” series, and is launching ads on scripted content. As a paid option, customers wishing to watch ad-free content can pay an extra $3 per month atop their Prime membership.
Context: Industry-wide Layoffs
Layoffs in the tech industry have grown increasingly common as companies adjust their operations following a pandemic-induced hiring surge. Similar job cutting measures were announced by Amazon in 2023, together with Meta – Facebook and Instagram’s parent company – and Alphabet, Google’s parent corporation. Recently, Xerox also declared a 15% staff reduction from its 23,000-strong workforce.
As such, this week’s layoffs announcement by Amazon can be seen as part of a broader industry trend involving the optimization of resources and operational efficiency as digital companies matured following an extraordinary period of growth.