Amazon has unveiled plans for a substantial restructuring, leading to a considerable number of layoffs within its Prime Video and Amazon MGM Studios divisions. These layoffs were revealed by Senior Vice President Mike Hopkins in an internal memo. As part of the restructuring, several hundred employees from Prime Video and Amazon Studios will be impacted via the layoffs. Twitch also saw nearly 500 employees being laid off, just a few days ago.
This restructuring initiative follows a series of layoffs initiated by CEO Andy Jassy in late 2022 and early 2023, where over 27,000 employees were let go. Jassy’s stated goal has been to streamline operations and enhance efficiency after a period of rapid expansion during the pandemic. Hopkins noted that Amazon will be reaching out to the impacted employees – those in the Americas are expected to be notified by the morning (Pacific time), while those in most other regions will be notified by the end of the week. The company is providing impacted employees with comprehensive packages, including a separation payment, transitional benefits as applicable by country, as well as external job placement support.
Hopkins, in an internal memo accessed by Bloomberg, emphasized the rationale behind the restructuring: “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.” The emphasis is on discontinuing or reducing investments in specific areas while redirecting resources into content and product initiatives that promise the most significant impact.
Notably, the restructuring will affect Amazon’s most significant acquisition to date, MGM Studios, valued at $8.5Bn. Simultaneously, Amazon’s live-streaming platform, Twitch, is experiencing substantial cuts, with approximately 35% of its workforce, or around 500 workers, facing layoffs. This decision follows concerns over financial performance at Twitch and the departure of several high-level executives in recent months.
Amazon’s decision to realign its video streaming business through layoffs mirrors broader industry trends. Competitors such as Walt Disney Co., Paramount Global, and Warner Bros. Discovery Inc. are also implementing retrenchment strategies. This reflects a broader industry landscape where even streaming giant Netflix Inc. has refrained from increasing its content budget for the past two years. Industry experts predict a decline in the number of scripted shows released in the US, moving from the peak of 599 in 2022 to an anticipated 400 this year.
