Layoffs are hitting Amazon’s entertainment businesses.

Twitch, the industry-leading livestreaming platform Amazon acquired in 2014, is cutting more than 500 jobs.

In a memo to employees shared on the company’s blog, Twitch CEO Dan Clancy said the company has been cutting costs over the last year — including a separate round of layoffs in March — but “it has become clear that our organization is still meaningfully larger than it needs to be given the size of our business.”

“As with many other companies in the tech space, we are now sizing our organization based upon the current scale of our business and conservative predictions of how we expect to grow in the future,” he wrote.

Bloomberg said the layoffs at Twitch impacts about 35% of staff and reported that the business is unprofitable.

Meanwhile, Amazon’s Prime Video and MGM Studios organizations are making “several hundred” workforce cuts, according to a memo from Mike Hopkins, senior vice president of Prime Video and Amazon MGM Studios,

“..our industry continues to evolve quickly and it’s important that we prioritize our investments for the long-term success of our business,” Hopkins wrote in the memo, provided by Amazon.

CNBC first reported on the Prime Video and MGM cuts. Amazon acquired MGM in 2022 for $8.5 billion.

Over the past 12 months, Amazon has been trimming headcount in various areas after going on a hiring spree throughout much of the pandemic. It announced a 18,000-person layoff in January of last year, the largest in the company’s history, and cut another 9,000 jobs in March. Those layoffs were focused primarily on its corporate and technology workforce at its Seattle headquarters and other offices around the world.

Other units including gaming and music have made their own separate cuts since then.

More than 260,000 tech company employees were laid off in 2023, according to Layoffs.fyi, as organizations trimmed expenses amid uncertain economic conditions and higher interest rates.

Here’s the memo from Amazon’s Hopkins, sent to employees Wednesday:

Team,

We’ve taken significant steps towards our long-term vision of making Prime Video the first-choice entertainment destination for customers worldwide, and I’m proud of everything we’ve accomplished as a team to date. Our investments in programming, marketing, and technology have enabled us to expand our selection of blockbuster movies, hit tv series, live sports, the world’s largest TVOD catalog along with over 650 partner Channels worldwide, and AVOD services including Freevee – all available in a single destination, delighting customers around the globe. And, through our acquisition of MGM, we’ve increased our investments in theatrical films and driven growth in MGM+ and our licensing and third-party production businesses.

Yet, at the same time, our industry continues to evolve quickly and it’s important that we prioritize our investments for the long-term success of our business, while relentlessly focusing on what we know matters most to our customers. Throughout the past year, we’ve looked at nearly every aspect of our business with an eye towards improving our ability to deliver even more breakthrough movies, TV shows, and live sports in a personalized, easy to use entertainment experience for our global customers. As a result, we’ve identified opportunities to reduce or discontinue investments in certain areas while increasing our investment and focus on content and product initiatives that deliver the most impact. As a result of these decisions, we will be eliminating several hundred roles across the Prime Video and Amazon MGM Studios organization.

Today, we will begin to reach out to colleagues who are impacted by these role reductions. Notifications will be sent out shortly, and we expect all notifications in the Americas to be completed this morning (Pacific time), and most other regions by the end of the week. We are following local processes, which may include time for consultation with employee representative bodies, possibly resulting in longer timelines to communicate in some countries.

This is a difficult decision to make and one that my leadership team and I do not take lightly.  It is hard to say goodbye to talented Amazonians who’ve made meaningful contributions on behalf of our customers, team and business. Thank you for your dedication and work. To help with the transition, we are providing packages that include a separation payment, transitional benefits as applicable by country, and external job placement support.

Our prioritization of initiatives that we know will move the needle, along with our continued investments in programming, marketing and product, positions our business for an even stronger future. Prime Video is one of the most popular benefits for Prime members, and one of most widely used entertainment destinations in the world. I’m proud of the work you do every day on behalf of our customers, and I’m looking forward to continuing to build our business for the future.

-Mike

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