Latest Amazon job cuts hit streaming platform Twitch
Amazon on Monday announced 9,000 job cuts after it had already laid off 18,000 employees earlier this year.
The units affected include advertising, human resources, the cloud-computing business Amazon Web Services and Twitch, a platform for creators, known for livestreaming video game play.
As tech giants lay off scores of workers amid a sector-wide downturn, employees who once considered the Silicon Valley companies a safe long-term bet are reconsidering their allegiances.
“This was a difficult decision, but one that we think is best for the company long term,” Amazon Chief Executive Andy Jassy wrote in a memo to employees that was posted on the company’s website.
As tech giants lay off scores of workers amid a sector-wide downturn, employees who once considered the Silicon Valley companies a safe long-term bet are reconsidering their allegiances.
Amazon stock declined about 2.6% on Monday morning, to $96.40 a share.
Twitch said that more than 400 people would be affected by the layoffs.
“Like many companies, our business has been impacted by the current macroeconomic environment, and user and revenue growth has not kept pace with our expectations,” Twitch CEO Dan Clancy said in a blog post. “In order to run our business sustainably, we’ve made the very difficult decision to shrink the size of our workforce.”
Clancy stepped into the chief executive role at Twitch last week after longtime CEO Emmett Shear announced he was stepping down and would work in an advisory role. Shear, who had been CEO since 2011, said he wanted to spend more time with his son. Clancy was previously Twitch’s president.
Inside the library of a Hollywood Hills home, actress Tiffany Chu gazed expectantly at the camera, waiting for guidance from the audience.
Amazon bought Twitch in 2014 for $970 million as a way for the company to expand its footprint in gaming and cultivate a relationship with the platform’s more than 1 million broadcasters, which included gamers, esports organizations, publishers and other creators at the time.
Today Twitch has about 2.58 million concurrent viewers, and there have been challenges regarding its growth, according to Ray Wang, a principal analyst at Palo Alto-based Constellation Research. Viewership declined 6% in 2022 compared with 2021, Wang said.
“They over-invested in Twitch, but the growth has not caught up,” Wang said.
It’s an area that other media companies have also had to grapple with, where there was a surge of viewership during the early days of the COVID-19 pandemic as people stayed home and looked to entertain themselves. Now, there’s a challenge in trying to keep those audiences engaged.
Spotify says it is cutting staff as it focuses on improving efficiency in a challenging economic environment, according to CEO Daniel Ek.
“Things have been different post-pandemic,” Wang said in a text message.
An Amazon representative said the reductions would not hit Culver City-based Amazon Studios, the company’s film and television business.
Amazon’s announcement Monday follows layoffs at other tech and media companies. In January, Spotify said it was reducing its employee base by 6%, and last week, Meta announced a second round of job cuts, laying off 10,000 staffers and eliminating 5,000 open roles.
“We believe this is Amazon ripping the band-aid off on more layoffs as the bloated cost structure is front and center for Jassy in this softer macro,” said Daniel Ives, a managing director at Wedbush Securities. “It’s the right medicine at the right time for Amazon and the Street wants to see these moves as Silicon Valley continues to cost cut.”
Inside the business of entertainment
The Wide Shot brings you news, analysis and insights on everything from streaming wars to production — and what it all means for the future.
You may occasionally receive promotional content from the Los Angeles Times.
