Amazon will cut the workforce of several of its brands and subsidiaries, such as Prime Video, Twitch and MGM Studios, by cutting hundreds of jobs. The goal ? Building a “more sustainable” business.
Despite exceptional profits, Amazon has laid off more than 27,000 employees in 2023. At the start of the year, hundreds of them are once again affected by layoffs, which will take place on the side of the streamers’ platform, Twitch, but also at Prime Video and within the distribution giant MGM (Metro-Goldwyn-Mayer), which it has owned for two years. Let’s see what is pushing the American juggernaut to downsize today.
Amazon, which wants to redirect its investments, mentions a “ difficult decision to make »
The bad news came from an internal memo, which our colleagues at Reuters were able to obtain. The employee information process began Wednesday in the United States, and is expected to extend to other affected regions of the world by the end of the week.
In the note, the senior vice president of Prime Video and Amazon MGM Studios, Mike Hopkins, explains that the measures aim to redirect the group’s investments towards more impactful content and product initiatives. Evoking a decision “ difficult to take “, the manager wrote that he “ identified opportunities to reduce or discontinue investments in certain areas “.
Despite Amazon spending heavily in recent years to build its media footprint, including the $8.5 billion acquisition of MGM and a $465 million investment in the first season of The Lord of the Rings: Rings of Power on Prime Video in 2022, the company seeks to optimize its resources.
The giant deploys its solutions to improve its results
Several avenues are already being explored by the American giant, which plans to introduce advertisements on Prime Video and offer a more expensive ad-free subscription level in certain markets. Amazon would align here with the strategies of its rivals Netflix and Disney+.
At the same time, several companies, after waves of layoffs in 2022 and 2023, are now targeting specific projects and divisions to redefine their priorities in terms of resources. For example, Amazon has also made job cuts in its Alexa voice assistant division, while Microsoft recently laid off employees from its professional network LinkedIn.
The one that is most talked about in recent days is the still unprofitable streaming service Twitch, owned by Amazon, which is also expected to undergo massive layoffs, affecting around 500 employees, or around 35% of its total workforce. . Despite these adjustments, Amazon shares rose 1.5% in afternoon trading, maintaining a positive trend after rising more than 80% last year. Proof that the company, whose shares are gradually returning to their levels at the end of 2020 and 2021, retains the full confidence of its investors.
Source : Reuters
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