Amazon Games, the gaming arm of the tech giant, has initiated a restructuring process resulting in the elimination of 180 positions.
This development comes as part of the broader trend of job cuts within the gaming industry in 2023, impacting major players like Epic Games, Ubisoft Montreal, and Niantic.
Amazon Games Job Cuts Amid Restructuring
The restructuring, which includes the shutdown of Amazon's own channel on the Twitch platform, reflects the company's effort to streamline operations, according to Reuters.
Despite being the owner of Twitch, the platform faced challenges in gaining popularity, leading to the decision to discontinue its channel.
The gaming industry has witnessed a series of job cuts in 2023, with approximately 6,500 roles being eliminated. This trend is notable, considering the release of blockbuster games from renowned franchises such as Zelda, Spider-Man, and Mario throughout the year.
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Evolution of Amazon Games
Established in 2012 with a focus on mobile games, Amazon Games expanded its portfolio to include larger titles like New World and Lost Ark.
Notably, the company announced plans to publish a new single-player game based on the iconic Tomb Raider franchise in 2022, followed by the development of a Lord of the Rings-themed game in May 2022.
According to an internal email obtained by the BBC, Christoph Hartmann, Vice President of Amazon Games, communicated that the restructuring was a necessary step after the initial overhaul in April. He emphasized the company's commitment to concentrating resources on areas with the highest potential for business growth.
Broader Tech Industry Layoffs
The gaming industry job cuts align with a larger trend of job reductions across the tech sector in 2023. Amazon itself has announced over 25,000 job cuts, reflecting the impact of various factors, including the pandemic and changes in consumer behavior.
Christopher Dring, the head of gaming news site GamesIndustry.biz, attributes the gaming job losses to the hiring surge during the pandemic.
As the demand for video games soared during lockdowns, companies increased hiring, leading to a correction phase as sales slowed post-lockdown.
"Games studios expanded and added new teams, game developers were leaving their jobs to form new studios, and the likes of Microsoft, Sony, Tencent, Embracer, Amazon, Take-Two, EA, and so on were spending billions of dollars buying up companies," he said in a report by BBC.
Challenging Year For Gaming Firms
While 2023 has been a banner year for the gaming industry, with the release of highly acclaimed titles, the job cuts indicate challenges faced by companies. Rising costs, inflated spending during the pandemic, and a need to control expenditures are factors contributing to the current corrective phase.
In navigating these industry shifts, Amazon Games aims to optimize its structure for sustained growth, signaling the dynamic nature of the gaming landscape and the ongoing need for strategic adaptation.
