Amazon is undertaking a workforce reduction within its gaming division, as disclosed in an internal communication reported by Reuters. This move, constituting the second round of layoffs within a week, is part of the company's larger restructuring strategy. According to an internal memo shared with employees, the job cuts are positioned as a strategic manoeuvre to intensify efforts in areas with the highest growth potential.
Christoph Hartmann, Vice President of Amazon Games, conveyed in an email viewed by Reuters on Monday, "After our initial restructuring in April, it became clear that we needed to further concentrate our resources on the areas that are experiencing the highest potential for driving our business forward." He emphasised a focus on meeting customer demands, stating, "We've listened to our customers and we know delivering free games every month is what they want most, so we are refining our Prime benefit to increase our focus there."
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The layoffs, initiated on Monday, targeted approximately 180 employees, informing them that their positions were being eliminated. This marks the second round of divisional layoffs within the year, following reductions in the streaming music and podcast division and the People Experience and Technology (PXT) unit.
Amazon's Gaming division is responsible for delivering downloadable games, Twitch channels, and other monthly services, with a focus on titles like 'Blue Protocol' and complimentary games for Prime members through Prime Gaming. Despite the recent workforce reductions, this is the second wave of layoffs in the Games Division, with around 100 jobs previously eliminated.
Over the past year, Amazon has reduced more than 27,000 jobs amid a broader trend of tech layoffs following industry challenges during the pandemic. However, the company's third-quarter net income exceeded analyst expectations, and it anticipates fourth-quarter revenue to align with expectations.
In the face of these layoffs, Amazon is actively hiring for other roles within the gaming division. Hartmann assured employees of the company's confidence in the future, acknowledging the challenges and changes faced by the workforce this year.
Simultaneously, Amazon is making substantial investments in language models, notably in Olympus, a new model with 2 trillion parameters. This initiative, spearheaded by CEO Andy Jassy, is positioned to compete with leading models from OpenAI and Alphabet. The success of Olympus could potentially contribute significantly to Amazon's revenue, as the company continues to sell language models, including those from entities like Anthropic.