Amazon plans to cut hundreds of jobs from Twitch and Prime Video

An internal memo states the company has recognized prospects to scale back or discontinue investments in specific areas, contributing to a wave of layoffs

On Wednesday, Amazon revealed plans to dismiss several hundred workers in its streaming and studio operations, as outlined in an internal memo. Coincidentally, on the same day, Twitch, a live-streaming company and subsidiary of the e-commerce giant, announced a workforce reduction of approximately 35%, affecting 500 employees.

Last year, Amazon eliminated over 27,000 positions in a wave of layoffs in the US tech sector, signaling the end of the industry’s hiring surge during the pandemic. The trend was not exclusive to Amazon; Facebook and Microsoft each reduced their workforce by 10,000 employees, while Google made cuts amounting to 12,000 jobs.

“We have recognized opportunities to decrease or halt investments in specific areas while enhancing our focus and investment in content and product initiatives that yield the greatest impact,” stated Mike Hopkins, Senior Vice President of Prime Video and Amazon MGM Studios, addressing employees.

Dan Clancy, Chief Executive of Twitch, acknowledged in a blog post that the company had become overly optimistic about the pace of its business expansion, resulting in it growing too large.

Clancy stated, “We still have work to do to rightsize our company. For some time now, the organization has been sized based upon where we optimistically expect our business to be in three or more years, not where we’re at today.”

In recent years, Amazon has pursued aggressive spending to strengthen its media ventures. This includes an $8.5 billion acquisition of MGM and an investment of approximately $465 million in the first season of “The Lord of the Rings: The Rings of Power” on Prime Video in 2022. Additionally, Amazon plans to introduce advertisements on Prime Video and a pricier ad-free subscription tier in select markets, mirroring strategies adopted by competitors Netflix and Disney.