Amazon plans to lay off hundreds of employees at its subsidiaries, Twitch, Prime Video, and MGM Studios.
An announcement from CEO Dan Clancy states that around 500 Twitch workers—a third of the streaming platform's workforce—will be let go.
According to Amazon, this week will also see the layoff of several hundred workers at MGM Studios and Prime Video.
Notwithstanding record earnings, the software behemoth will let go of more than 27,000 employees in 2023.
When Twitch first launched, it was designed to allow players to watch and chat about online video gameplay. It was bought by Amazon in 2014 for $970m (£585m at the time).
In an email to employees, Clancy stated that he was taking the "painful step to reduce our headcount" in order to "build a more sustainable business."
He noted that the firm paid out $1 billion to streamers in 2023 but had "conservative predictions of how we expect to grow in the future."
According to Amazon's most recent earnings report, the company earned $9.9 billion in profit from July to September. This was up from $2.9 billion at the same time in 2022.
In an email to Prime Video and Amazon MGM Studios employees, senior vice president Mike Hopkins wrote, "We've identified opportunities to reduce or discontinue investments in certain areas while increasing our investments and focusing on content and product initiatives that deliver the most impact."
Hopkins noted that it was a "difficult decision to make."
The email stated that job losses harm employees in the United States and around the world.
In 2021, Amazon paid $8.45 billion for MGM Studios, which had been around for 100 years.
In December, it stated that it would begin advertising on Prime Video on February 5, 2024.
Amazon's layoffs are the latest in a long line of employment cuts in the tech sector, which grew swiftly as consumers increasingly resorted to digital services during the epidemic, only to contract as that excitement faded.
According to US employment firm Challenger, Gray & Christmas, the technology sector will shed 168,032 jobs in 2023, up 73% from 2022.