E-commerce giant Amazon.com is set to lay off several hundred employees in its Prime Video and Amazon MGM Studios, as reported by the media.
In an internal note to employees, Mike Hopkins, senior vice president of Prime Video and Amazon MGM Studios, stated that the restructuring aims to enhance the delivery of breakthrough movies, TV shows, and live sports in a personalized and user-friendly entertainment experience for global customers.
Hopkins mentioned, “As a result, 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.”
The affected staff in the United States will be informed on Wednesday, and notifications for most other regions will follow by the end of the week. This move comes after Amazon’s significant workforce reduction of over 27,000 jobs last year as part of wider tech layoffs in the United States.
In recent years, Amazon has made substantial investments in its media business, including the $8.5 billion deal for MGM and around $465 million for the first season of “The Lord of the Rings: The Rings of Power” on Prime Video in 2022.
Bloomberg also reported that Amazon’s Twitch livestreaming service is preparing to announce cuts of about 35% of its staff, affecting around 500 workers. The video streaming industry is witnessing retrenchment efforts by companies like Walt Disney Co., Paramount Global, and Warner Bros. Discovery Inc.
Notably, Netflix Inc. has not increased its content budget in the past two years. Amazon, in response to industry trends, is planning to introduce an ad-free subscription tier for Prime Video in some markets, aligning with strategies adopted by competitors Netflix and Walt Disney.
As of 10:58 am GMT, Amazon.com shares were trading higher by more than 1 percent on the Nasdaq. This strategic restructuring reflects Amazon’s evolving approach to prioritize impactful content and product initiatives in the competitive streaming landscape.