Amazon Lays off Hundreds at Prime Video, MGM

Amazon may be looked at as a money-generating empire, but the entertainment division is not looking that way right about now. News reports state that Amazon is going to be laying off "several hundred" employees from both Prime Video and MGM, which was recently acquired by Amazon. 

According to additional reporting by Variety, about "500 employees – or 35% of the workforce" over at streaming platform Twitch will also be let go. 

"This is a difficult decision to make and one that my leadership team and I do not take lightly," Amazon entertainment chief Mike Hopkins said in a reported email to staff. "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."

"I know many of you are wondering why this is happening. Over the last year, we've been working to build a more sustainable business so that Twitch will be here for the long run and throughout the year we have cut costs and made many decisions to be more efficient," Twitch CEO Dan Clancy wrote in a blog post. "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. Last year we paid out over $1 billion to streamers. So while the Twitch business remains strong, for some time now the organization has been sized based upon where we optimistically expect our business to be in 3 or more years, not where we're at today. 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."

This latest round of cuts comes as part of a larger whole that has seen Amazon cut nearly 20,000 jobs from its overall workforce. On a Marco level, it's also part of the industry-wide culling that has been rolling over the entertainment for the past year. As Clancy's blog post indicates, the entertainment industry took a speedy detour during the COVID-19 pandemic; it's clear now that media companies grossly overestimated the market for both streaming and post-pandemic content production, with swollen teams of employees to produce, market, and distribute it. As the post-pandemic economy goes through the natural corrections, media, as an industry, is having to shed weight across the board. The Hollywood Writers' and Actors' Strikes only exacerbated the problem, with production pipelines frozen for nearly half a year, meaning significantly less profits projected for 2024 – more justification of shedding major costs like staff.