Amazon has cut more than 180 jobs in its Amazon Games division as part of reshaping its presence in the gaming industry. The move reflects the company's strategic efforts to adapt to evolving circumstances, but it undoubtedly brings uncertainty and challenges for those affected by the latest round of workforce reductions. 

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Amazon to Shut Down Businesses Focusing on Streaming, Supporting Third-Party Games

The company's internal memo viewed by CNBC highlighted a significant shift in focus, with Amazon opting to shut down aspects of its business related to streaming and supporting third-party games. Instead, the internet retail and streaming giant is directing its efforts and resources in developing its own titles.

This move follows a series of recent restructuring initiatives, marking at least the second round of layoffs in under a week and the second cut to the Amazon Games division this year. 

Amazon reportedly started cutting jobs in its streaming music and podcast division and at its human resources unit, known as People Experience and Technology (PXT), last week. The company also cut around 100 jobs in the games unit last April.

In the November 13 email viewed by Reuters, Christoph Hartmann, vice president of Amazon Games, said: "After our initial restructuring in April, it became clear that we needed to focus our resources even more on the areas that are growing with the highest potential to drive our business forward."

Hartmann also wrote in the memo to employees: "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."

According to CNBC, the shares of Amazon on Monday closed down less than 1%.

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Amazon Third Quarter Earnings 

The recent cuts came even as Amazon's third-quarter net income rose. In Amazon's third-quarter earnings announced in October, the company suggested that its cost-cutting has been paying off. 

Amazon said it experienced a 13% surge in revenue, reaching $143.1 billion compared with $127.1 billion in the third quarter of 2022. Its net income also increased to $9.9 billion compared with $2.9 billion in the third quarter of last year.

In the memo, Hartmann wrote that after further evaluation of the Amazon Games business, the company came to a decision that a strategic shift was necessary. He said there was a need to focus the company's efforts and resources "to deliver great games to players."

According to Hartmann, Amazon is now focusing on the free games known as Prime Gaming, which is being offered as a perk in the $139 annual Prime membership that also includes free streaming video and free shipping.

"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," he noted.

Despite the layoff announcements, Hartmann remains confident in the company's future.

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