On Wednesday local time, an email sent by Amazon to employees showed that the company would lay off hundreds of employees in Prime Video and MGM Studios. During the US stock market session, Amazon's stock price rose 1.8%.
Mike Hopkins, head of business at Amazon Prime and Studios, said, "The company has identified opportunities to reduce or stop investments in certain areas, while seeking to increase spending on some of the most impactful content and product projects."
Hopkins claims that over the past year, we have almost examined all aspects of our business, focusing on improving our capabilities to provide more groundbreaking movies, TV shows, and sports live broadcasts to global users, as well as providing personalized and easy-to-use entertainment experiences. As a result, we will lay off hundreds of employees in Prime Video and MGM Studios.
As part of the wave of layoffs in the US technology industry, this online retail giant has cut over 27000 jobs in the past two years.
Amazon has been investing heavily in recent years to strengthen its media business, including investing $8.5 billion to acquire MGM and investing $465 million in the production of the first season of The Lord of the Rings: The Ring of Power on Prime Video in 2022.
In the media field, Amazon Streaming Prime Video will be advertising in North America starting from January 29th and will be available in global markets starting from February 5th. Amazon Prime North American members can pay an additional $2.99 per month to waive these advertisements, similar to the measures taken by competitor Netflix.
Amazon is not the only company hoping to reduce streaming business costs. Disney, Paramount, and Warner Bros. Exploration are all cutting expenses, while Netflix has not increased its content budget for two years.
At the same time, Amazon's live streaming website Twitch plans to lay off about 500 employees, accounting for about 35% of the total workforce. This layoff will be Twitch's second large-scale layoff in less than a year.
Twitch CEO Dan Clancy claimed that this was a "very difficult" decision, despite efforts to establish a more sustainable business, the current scale of the business does not require so many personnel.
Clancy added, "Although Twitch's business remains strong, our organizational size has been based on our optimistic expectations for the next 3 years or longer, rather than our current situation. Twitch paid $1 billion to anchors through a revenue sharing model in 2023."
After experiencing large-scale layoffs in 2022 and 2023, many companies are now focusing on specific projects and departments, re prioritizing resources.
Amazon recently announced the layoffs of hundreds of positions in the Alexa voice assistant business unit, citing a shift in business focus and the need to allocate more resources to the field of generative artificial intelligence. Microsoft has also laid off hundreds of LinkedIn employees.