Amazon Axes Hundreds of Employees Across Streaming Business
Amazon has announced hundreds of layoffs across its Prime Video, TV and film studios, and Twitch businesses.
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Streaming has revolutionized entertainment. Now if only streamers can figure out how to make money off it.
Amazon announced hundreds of layoffs across its Prime Video and film studios businesses on Wednesday — just a day after saying it’s slashing hundreds of positions at Twitch, its livestreaming platform beloved by gamers and youngsters. Consider it just the latest move in the content industry’s quest to cut costs.
Rings of Sour
The Streaming Wars have turned into an expensive war of attrition. And like the rest of the industry, the e-commerce giant last year began to ponder why its investments failed to bear much fruit (the budget for the splashy but not-too-popular Lord of the Rings series, The Rings of Power, reportedly ran over $700 million alone). While some industry onlookers expected Big Tech players like Apple and Amazon to simply outspend their oft-struggling legacy media competition, it appears Amazon, at least, is starting to have doubts. And that lack of patience is now even extending to Twitch, which remains unprofitable despite the vast majority of the roughly 1.8 billion hours of livestreamed content created every month being provided by users for free.
In other words, there are no easy wins in the content-attention economy, and now Amazon employees are feeling the pain:
- The e-commerce giant is “eliminating several hundred roles across the Prime Video and Amazon MGM Studios organization,” Mike Hopkins, the senior VP for both divisions, wrote in a memo to staffers Wednesday seen by CNBC. Amazon acquired MGM in 2022 for $8.5 billion.
- Meanwhile, roughly 500 Twitch employees, or 35% of its staff, will be let go. The division has been unprofitable since Amazon acquired it nine years ago, sources told Bloomberg; last year, longtime Twitch CEO Emmett Shear left the company, Twitch paid creators roughly $1 billion combined, and the company ceased operations in South Korea in December due to prohibitive costs.
Adding Up: Just a year ago, Amazon laid off roughly 27,000 employees across various divisions, citing pandemic-era overhiring.
Peaked: Amazon’s headcount-culling may just be more evidence than ever that the 599 original scripted shows aired in 2022 marked the definitive point of “Peak TV.” While labor strikes decimated content pipelines last year, most industry analysts still think just 400 shows will be made in 2024 as companies cut costs. Even Netflix, now the leading TV network in the world, is cutting back, per a recent Bloomberg report. If you’ve been locked out of your parent’s/roommate’s/cousin’s Netflix account, fret not: your favorite show may not even be coming back.