Amazon.com is set to implement significant workforce reductions within its streaming and studio operations, according to an internal communication on Wednesday. This move comes as companies continue to navigate the aftermath of substantial job cuts witnessed in the past two years, extending into 2024.
Several hundred employees at Prime Video and Amazon MGM Studios in the Americas will receive notifications on Wednesday, with similar notifications expected to reach staff in other regions by the week's end. In 2023, Amazon undertook a substantial workforce reduction, eliminating over 27,000 positions—a trend observed across the U.S. tech industry after a period of extensive hiring during the pandemic.
Mike Hopkins, Senior Vice President of Prime Video and Amazon MGM Studios, explained the decision in an internal note. "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."
Amazon has consistently invested heavily in its media business, exemplified by the $8.5 billion acquisition of MGM and a substantial $465 million expenditure on the inaugural season of "The Lord of the Rings: The Rings of Power" on Prime Video in 2022. The company is also poised to introduce advertisements on Prime Video and a pricier ad-free subscription tier in select markets, aligning with strategies employed by competitors Netflix and Walt Disney.
Following widespread job cuts in 2022 and 2023, companies are now scrutinizing specific projects and divisions to reallocate their resources effectively. Amazon recently downsized its workforce in the Alexa voice assistant division, while Microsoft implemented staff reductions in its LinkedIn professional network. Furthermore, Amazon's Twitch service is reportedly preparing to lay off approximately 35% of its workforce, totaling 500 employees, as per a media report on Tuesday.
Despite these workforce adjustments, Amazon's shares, which witnessed an impressive surge of over 80% last year, experienced a 1.5% increase in afternoon trading.