Amazon has announced a new wave of layoffs. According to new information, these will also significantly affect the gaming sector and Twitch, reducing a significant part of the workforce.
What are these layoffs? Amazon stated in a release that it will initiate a restructuring process that will involve both layoffs and new hires. However, after the restructuring, there will be 14,000 fewer positions than before.
Primarily, it will reduce administrative office positions, according to information from Tagesschau. Employees who will be laid off are to receive 90 days’ notice before they must leave the company. According to new reports, employees involved in major gaming projects and Twitch are also significantly affected.
Major Cuts at Amazon Games
What is known about Amazon Games? According to industry insider Jason Schreier, “significant” cuts are planned for Amazon’s video game division. According to his article on Bloomberg.com, the layoffs primarily affect the studios in Irvine and San Diego, as well as employees working in publishing.
As Schreier reports, Amazon will reduce work on high-budget titles, especially MMORPGs and other multiplayer games. This will primarily impact titles like New World, but also Throne and Liberty and Lost Ark. Although they are not being developed directly by Amazon, the company has substantially changed the games compared to their Asian versions as a publisher.
However, it will continue for the development studio in Montreal, which is currently tasked with developing the strategy game “March of Giants.” Additionally, according to industry insider information, the company plans to retain focus on “casual games and AI-focused games.” The external studio Crystal Dynamics, which is working on a new Tomb Raider in San Francisco, as well as Maverick Games, which is developing a racing game for Amazon in the UK, are also expected to remain.
It remains unclear how the development will affect the planned LOTR MMORPG. This was supposed to be Amazon’s major new MMORPG success following New World.
Layoffs at Twitch as well
How will the layoffs affect Twitch? According to a report by the Economic Times India Times and industry insider Zach Bussey on X.com, Twitch employees are significantly affected by the layoffs.
According to the report, 500 positions are to be cut, which would significantly reduce the number of employees. Just in January 2024, 500 employees were laid off, corresponding to about 35% of the workforce. This would mean that only about 1,000 employees would be left at Twitch, with another 500 set to depart.
While it’s unclear how many employees Twitch currently has, it can be assumed that once again a significant portion of the staff will be laid off.
What is behind the layoffs? In a blog post from Amazon, the company explains the restructuring as a response to the success of artificial intelligence. The company states in the post:
We must not forget that the world is changing rapidly. The current generation of AI is the most transformative technology since the internet and allows companies to innovate much faster than ever before (both in existing and completely new market segments). We are convinced that we need to be leaner, with fewer levels of hierarchy and more personal responsibility, to move forward as quickly as possible for our customers and our business.
With a more agile company, the aim is to work more efficiently with the help of artificial intelligence. However, the company does not disclose in the blog post how it intends to integrate this at Twitch and simplify the work of remaining employees to compensate for the eliminated positions.
Amazon employs about 350,000 people in administration and office jobs. The fact that 14,000 will be laid off seems small. However, if it really affects about half of Twitch’s employees, the cuts could also be felt by users. So far, Amazon has not commented on exact figures for its various divisions. A major issue for Twitch is profitability: Head of Twitch publicly admits they are not making money: “We were bigger than we needed to be”
