Amazon.com (AMZN.O) has announced its plans to reduce its workforce in the streaming and studio divisions, affecting several hundred employees.
This move comes as many companies continue to implement significant job cuts, extending a trend that began over the past two years into 2024.
In an internal memo issued on Wednesday, Amazon revealed that the employees facing layoffs at Prime Video and Amazon MGM Studios in the Americas would receive notifications on Wednesday, with notifications for most other regions expected to be completed by the end of the week.
The e-commerce giant had already undergone a significant downsizing in the previous year, eliminating more than 27,000 jobs as part of the broader wave of job reductions seen in the U.S. tech industry following the hiring spree during the pandemic.
Mike Hopkins, the Senior Vice President of Prime Video and Amazon MGM Studios, conveyed to employees through a note that the company had identified opportunities to trim or discontinue investments in specific areas while intensifying its focus and investment in content and product initiatives that have the greatest impact.
Amazon had been aggressively investing in its media business in recent years, such as the acquisition of MGM for $8.5 billion and spending approximately $465 million on the first season of “The Lord of the Rings: The Rings of Power” on Prime Video in 2022.
The company is also set to introduce advertising on Prime Video and offer a more premium ad-free subscription tier in select markets, taking cues from rivals like Netflix (NFLX.O) and Walt Disney (DIS.N).
Following the widespread job cuts witnessed in 2022 and 2023, many companies are now strategically targeting specific projects and divisions as they reallocate their resources.
Amazon’s recent job cuts at its Alexa voice assistant division and Microsoft’s removal of some staff at its LinkedIn professional network are examples of this trend.
Additionally, Amazon’s Twitch service is reportedly planning to lay off 500 employees, amounting to about 35% of its workforce, as per a recent media report.
Despite these developments, Amazon’s stock, which soared by more than 80% the previous year, saw a 1.5% increase in afternoon trading.