Amazon layoffs hit Prime Video, MGM studio, and Twitch

The ecommerce giant is cutting hundreds of employees from its streaming and movie divisious, according to an internal memo seen by Fortune. The cuts will affect Amazon MGM Studios, Prime Video, and the streaming service Twitch, an independent subsidiary that’s still unprofitable nine years on from its acquisition. 

This is the second year in a row that the company is launching the new year with job cuts. Last year, Amazon had two rounds of layoffs that slashed a total of 27,000 jobs across the company, including in HR, its AWS cloud computing unit, and advertising business. 

This batch of changes at Amazon come as companies across the streaming industry are reckoning with the difficulty of a business that has, so far, proven to have limited profits and high expenses. Amazon spent big money to bolster its content library, including an $8.5 billion deal to acquire the Hollywood studio MGM in 2022, and an 11-year, $11 billion broadcasting deal with the NFL that gives Amazon exclusive rights to broadcast Thursday Night Football.

Across the media landscape, companies are rethinking the strategy for their streaming services, which had previously prioritized gaining subscribers at all costs. Now, with borrowing costs high and inflation-strapped consumers being more choosy about entertainment, Amazon and its peers are looking to trim down costs and become more selective in the content they make and distribute, all while considering new sources of revenues. Some have introduced ads,  emboldened by industry leader Netflix, which once swore it would never have advertising, adding it in 2022. Amazon itself will introduce ads to Prime video shows at the end of the month. Others, like Warner Bros. Discovery and NBCUniversal, have taken to licensing out content that had previously been exclusive to their own streaming services in exchange for some much-needed…