Some Amazon employees are starting the new year in the worst possible way: On the unemployment line.
On Wednesday, Amazon told hundreds of workers across its Prime Video and MGM Studios businesses that they will soon be out of a job as the company works to recalibrate its investments throughout its video business. Separately, Amazon-owned Twitch said it would cut 500 jobs as part of a broader strategy to become a self-sufficient business.
A memo written by Mike Hopkins, the Amazon executive in charge of Prime Video and MGM Studios, opened with several paragraphs touting the milestones of both businesses over the past few years — achievements that the company reached with the direct assistance of many of the employees who are now out of a job.
“Our industry continues to evolve quickly, and it’s important that we prioritize our investments for the long-term success of our business, while relentlessly focusing on what we know matters most to our customers,” Hopkins wrote in the memo. “Throughout the past year, we’ve looked at nearly every aspect of our business with an eye towards improving our ability to deliver even more breakthrough movies, TV shows, and live sports in a personalized, easy to use entertainment experience for our global customers. 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 end result of that review will see hundreds of employees departing the company over the next several weeks. The majority of those affected workers were notified by the end of Wednesday morning, though the company is still in the process of telling employees who live outside the United States, a time-intensive task burdened by vacations and time zones.
“This is a difficult decision to make and one that my leadership team and I do not take lightly,” Hopkins said. “It is hard to say goodbye to talented Amazonians who’ve made meaningful contributions on behalf of our customers, team and business.”
Affected employees at Prime Video and MGM Studios will receive some severance and other benefits “as applicable by country,” Hopkins wrote.
Dan Clancy, the CEO of Twitch, was more conciliatory in his note, saying the business still has “work to do to rightsize our company,” which will require eliminating 500 jobs there.
“This will be a very hard day,” Clancy wrote. “Our service exists to empower communities to create, together, and every single one of you has played a vital role in fostering our community and furthering that mission.”
Clancy said Twitch had reoriented parts of its product over the past 12 months with the goal of building “a more sustainable business, so that Twitch will be here for the long run.”
“Throughout the year, we have cut costs and made many decisions to be more efficient,” Clancy wrote. “Unfortunately, despite these efforts, it has become clear that our organization is still meaningfully larger than it needs to be given the size of our business.”
It is the third time Twitch has issued pink slips to workers in less than a year: Last spring, the company laid off around 400 workers, followed by a small round of job cuts last October.
The full memo written by Mike Hopkins and sent to Prime Video and MGM Studios employees is below:
We’ve taken significant steps towards our long-term vision of making Prime Video the first-choice entertainment destination for customers worldwide, and I’m proud of everything we’ve accomplished as a team to date. Our investments in programming, marketing, and technology have enabled us to expand our selection of blockbuster movies, hit TV series, live sports, the world’s largest TVOD catalog along with over 650 partner Channels worldwide, and AVOD services including Freevee – all available in a single destination, delighting customers around the globe. And, through our acquisition of MGM, we’ve increased our investments in theatrical films and driven growth in MGM+ and our licensing and third-party production businesses.
Yet, at the same time, our industry continues to evolve quickly and it’s important that we prioritize our investments for the long-term success of our business, while relentlessly focusing on what we know matters most to our customers. Throughout the past year, we’ve looked at nearly every aspect of our business with an eye towards improving our ability to deliver even more breakthrough movies, TV shows, and live sports in a personalized, easy to use entertainment experience for our global customers. 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. As a result of these decisions, we will be eliminating several hundred roles across the Prime Video and Amazon MGM Studios organization.
Today, we will begin to reach out to colleagues who are impacted by these role reductions. Notifications will be sent out shortly, and we expect all notifications in the Americas to be completed this morning (Pacific time), and most other regions by the end of the week. We are following local processes, which may include time for consultation with employee representative bodies, possibly resulting in longer timelines to communicate in some countries.
This is a difficult decision to make, and one that my leadership team and I do not take lightly. It is hard to say goodbye to talented Amazonians who’ve made meaningful contributions on behalf of our customers, team and business. Thank you for your dedication and work. To help with the transition, we are providing packages that include a separation payment, transitional benefits as applicable by country, and external job placement support.
Our prioritization of initiatives that we know will move the needle, along with our continued investments in programming, marketing and product, positions our business for an even stronger future. Prime Video is one of the most popular benefits for Prime members, and one of the most widely used entertainment destinations in the world. I’m proud of the work you do every day on behalf of our customers, and I’m looking forward to continuing to build our business for the future.
The full memo written by Dan Clancy and sent to Twitch employees is below:
Today I have some incredibly difficult news to share. As you all know, we have worked hard over the last year to run our business as sustainably as possible. Unfortunately, we still have work to do to rightsize our company and I regret having to share that we are taking the painful step to reduce our headcount by just over 500 people across Twitch. This will be a very hard day. Our service exists to empower communities to create, together, and every single one of you has played a vital role in fostering our community and furthering that mission.
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. Unfortunately, despite these efforts, it has become clear that our organization is still meaningfully larger than it needs to be given the size of our business. Last year we paid out over $1 billion to streamers. So while the Twitch business remains strong, for some time now the organization has been sized based upon where we optimistically expect our business to be in 3 or more years, not where we’re at today. As with many other companies in the tech space, we are now sizing our organization based upon the current scale of our business and conservative predictions of how we expect to grow in the future.
This decision, while incredibly difficult and painful, is necessary to ensure that we can continue to serve our streamers sustainably without impacting their ability to support their careers on Twitch. Part of what makes this so difficult is the passion that so many of you share for the Twitch community, and the hard work you’ve put into serving our streamers.
I know you all are wondering what this decision means for you and your role moving forward. While we know it is better to hear about the impact face to face, we realize that it is more important to share the news with the affected individuals as quickly as possible. With that in mind, here’s what you can expect within the next hour.
If your role is affected by this decision and you live in the US, Canada, Brazil, Mexico, or Singapore.
In the next few minutes, I will send an email to this group of people sharing the unfortunate news that your position is being eliminated and important details on everything we’re doing to support you through this transition. Afterward, your org leader will reach out directly via email with more specific information about your severance package and to give you the option to speak with them individually. These 1:1 meetings will take place over the next few days.
If your role is affected by this decision and you’re in any country not listed above.
In the next few minutes, you will receive an email from Lauren Nunes with more specific information on the process and next steps, which vary by country.
For everyone who is leaving Twitch today, I know how important it is to say goodbye to your colleagues, so you will retain access to Slack and your email until 1 PM PT (if you are in Singapore, you will have access until 12 PM local time).
If your role was not affected.
I will send another email to this group confirming your role was not affected by this decision. Afterwards, I plan to host regional All Hands throughout the day so you all can hear from me directly. Details on the time of these sessions and calendar invites will come through later this morning.
I also want to acknowledge how disappointed I was yesterday that this information leaked. I am sorry for all of the anxiety that it caused over the last several hours. Our hope was that you all would hear from us this morning and very quickly understand how this impacted your role and we were unfortunately not able to accelerate the timeline, which I know is very frustrating.
I want to close with my sincerest apology to everyone who is leaving Twitch. You are some of the most talented, committed, and creative people I have ever worked with. Thank you for everything you’ve done to help us build Twitch and foster our community.
We are all here because we believe in the power of Twitch and our community – and while our mission is far from over, right now our focus is on taking care of each other. I am always grateful for how well you all support and show up for one another during our best and most difficult moments.
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