San Francisco (AFP) – Amazon’s gamer streaming unit Twitch on Wednesday announced that it was laying off 500 staff, reportedly one third of the company, as it struggles financially despite strong popularity among players.
The online shopping giant also said it was slashing hundreds of staff in its entertainment division, targeting both movie streaming service Prime Video and Amazon MGM Studio, the home of James Bond.
The cull comes as part of Amazon’s biggest ever job cutting plan launched last year, which it said will reach 27,000 positions across the company.
“I wanted to send a short note to let you know that we’ve made the difficult decision to reduce the size of our workforce today,” Twitch CEO Dan Clancy said in a blog post.
Founded in 2011, Twitch was acquired by Amazon in 2014 for close to $1 billion and has hit headwinds of late, recently shutting down its operations in major market South Korea due to cost issues.
The latest cuts, first reported by Bloomberg, came as Twitch has suffered an exodus of top executives amid the Amazon cost-cutting campaign.
They also came after previous rounds of staff cuts at the streamer, which is used by the gaming community to showcase live game play.
“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,” Clancy wrote.
“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.”
The cuts at Prime Video and at the Amazon MGM Studio division were also described as painful but necessary to keep the businesses in line with objectives.
“This is a difficult decision to make and one that my leadership team and I do not take lightly,” the company’s entertainment chief Mike Hopkins wrote in an email to staff.
But because the entertainment industry “continues to evolve quickly…it’s important that we prioritize our investments for the long-term success of our business.”
Amazon bought the iconic MGM studio in 2022, merging it with its own production studio where content is primarily geared towards the Prime Video streaming service, a rival to Netflix and Disney Plus.
As the company seeks to beef up revenue, last month Amazon said that Prime Video subscribers would start seeing ads on their service on January 29 and charge customers extra to receive films and series ad-free.
