Amazon Cuts Hundreds of Jobs at Studios and Twitch

The layoffs add to a growing number of cuts in the tech industry this past year.

Amazon is laying off hundreds of employees at its studio division as well as its subsidiary Twitch to reduce costs, the latest in a wave of new job cuts hitting the tech industry.

Twitch, a video streaming platform, will cut just over 500 roles, or 35 percent of its work force, according to a blog post on the company’s website. Prime Video and Amazon MGM Studios will eliminate hundreds of jobs, said an email sent to staff on Wednesday.

Since late 2022, Amazon has laid off 27,000 workers, as the company has slashed costs in an effort to recover from overexpansion during the pandemic.

“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,” Mike Hopkins, senior vice president of Prime Video and Amazon MGM Studios, wrote in the email. He said the company would shift its investments to focus on the highest-impact products and cut others.

Amazon’s cuts signal a concerning trend for tech companies, which laid off tens of thousands of employees last year in response to tough economic conditions and changes in consumer habits as people returned to everyday life in the wake of the pandemic. Xerox said this month that it would cut 15 percent of its 23,000-person staff, and the video game software provider Unity Software said it would cut 1,800 roles, or 25 percent of its work force.

Amazon said the layoff constituted a relatively small percentage of people in the division, although it declined to provide numbers. Twitch declined to comment beyond the blog post.

Amazon has worked 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 package of Prime offerings, which charges an annual fee for fast shipping and other perks.

It also acquired Twitch, which is popular with gamers who stream their online video play, for roughly a billion dollars a decade ago. Last year, the company laid off 400 people as part of overall cuts at Amazon, and in December Twitch announced that it would shut down its services in South Korea by the end of February, citing “prohibitively expensive” costs.

“Unfortunately, despite these efforts, it has become clear that our organization is still meaningfully larger than it needs to be given the size of our business,” Twitch’s chief executive, Dan Clancy, wrote in the blog post. He added that the decision “is necessary to ensure that we can continue to serve our streamers sustainably without impacting their ability to support their careers on Twitch.”

In 2023, layoffs affected over 9,000 people in the gaming industry, according to data collected by Gabelli Funds, an investment management firm.

“Layoffs were well above historic industry averages and impacted employees at some of the biggest companies in the industry,” including Epic Games and Microsoft’s Xbox, said Alec Boccanfuso, a research analyst at Gabelli Funds.

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