In a strategic move to refocus its gaming division, Amazon announced on Monday that it will be eliminating more than 180 jobs within its Amazon Games division.
This decision entails the closure of segments of the business dedicated to streaming and supporting third-party games.
The restructuring effort will see the discontinuation of Amazon’s Game Growth and Crown Channel initiatives.
The company is shifting its focus towards the development of its own gaming titles, as highlighted in an internal memo obtained by CNBC. Christoph Hartmann, the Vice President of Amazon Games, stated in the memo that the company will now prioritise upcoming launches such as “Throne and Liberty” and “Blue Protocol,” along with future initiatives like games based on “Tomb Raider” and “The Lord of the Rings.”
A difficult decision
Hartmann acknowledged the difficulty of the decision in the memo, stating, “I know this is difficult news, and that the impact will be felt widely. It never feels good to say goodbye to colleagues. This isn’t a decision the leadership team came to quickly; it was the result of extensive considerations and road mapping for our future.”
Amazon’s stock closed down by less than 1 percent on Monday following the announcement.
The move to streamline the gaming division comes as part of CEO Andy Jassy’s broader cost-cutting strategy in response to challenges posed by high interest rates and inflation. Over the past year, Amazon has executed its largest layoffs in history, cutting 27,000 jobs since the previous fall. Corporate hiring has been frozen, and Jassy has actively sought ways to reduce expenses across various units within the company.
In October, Amazon reported encouraging third-quarter earnings, indicating that its cost-cutting measures have been effective. The company’s revenue rose by 13 percent to $143.1 billion in the third quarter, while net income more than tripled to $9.9 billion compared to $2.9 billion the previous year.
Hartmann explained in the memo that the decision to cut jobs in the Amazon Games division stemmed from a thorough evaluation of the business. He emphasised the need to concentrate efforts and resources “to deliver great games to players now and in the future.”
Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.