Twitch, an Amazon gaming streaming business, revealed on Wednesday that it was laying off 500 employees, or roughly one-third of the company, due to financial difficulties despite its enormous player base.
The massive online retailer also announced that it was laying off hundreds of employees in its entertainment division, focusing on Amazon MGM Studio—home of James Bond—and movie streaming service Prime Video.
The reduction is a part of Amazon’s largest-ever job-cutting initiative, which was introduced last year and is expected to affect 27,000 positions throughout the organization.
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“I wanted to send a short note to let you know that we’ve made the difficult decision to reduce the size of our workforce today,” Twitch CEO Dan Clancy said.
Founded in 2011, Twitch saw difficulties recently and had to close down operations in South Korea, a significant market, due to financial concerns. Amazon purchased Twitch in 2014 for almost $1 billion.
As a result of Amazon’s cost-cutting drive, Twitch has seen a departure of senior executives. The most recent layoffs were initially announced by Bloomberg.
They also followed earlier rounds of layoffs at the streamer, which provides live gameplay demonstrations for the gaming community.
“I know many of you are wondering why this is happening. Over the last year, we’ve been working to build a more sustainable business so that Twitch will be here for the long run and throughout the year we have cut costs and made many decisions to be more efficient,” Clancy wrote.
It was also said that while the layoffs at Amazon MGM Studio and Prime Video were unpleasant, they were required to keep the companies operating toward their goals.
“This is a difficult decision to make and one that my leadership team and I do not take lightly,” the company’s entertainment chief Mike Hopkins wrote in an email.
However, due to the rapidly changing nature of the entertainment sector, “it’s important that we prioritize our investments for the long-term success of our business.”
In 2022, Amazon acquired the storied MGM studio and combined it with its own production studio to create content primarily for its Prime Video streaming service, which competes with Netflix and Disney Plus.
Amazon announced last month that, in an effort to boost income, Prime Video subscribers would begin seeing advertisements on the platform on January 29 and that there would be an additional fee to access movies and TV shows without any commercials.