Amazon has announced a workforce reduction of 180 positions in its gaming division as part of a broader restructuring effort.
Amazon, the internet giant that owns the popular game streaming site Twitch, has announced a workforce reduction of 180 positions in its gaming division as part of a broader restructuring effort. This move comes as the latest in a series of job cuts within the gaming industry in 2023, totaling around 6,500 layoffs across various companies.
Despite the gaming industry witnessing the release of highly successful titles from franchises like Zelda, Spider-Man, and Mario throughout the year, several prominent companies, including Epic Games (Fortnite), Ubisoft Montreal (Assassin’s Creed), and Niantic (Pokemon Go), have all previously announced job cuts.
Amazon Games, established in 2012, initially focused on developing games for mobile devices and later expanded into larger titles such as the online games New World and Lost Ark. In 2022, the company revealed plans to publish a new single-player game based on the iconic Tomb Raider franchise, and in May 2023, it announced the development of a game based on the Lord of the Rings.
The job cuts were communicated to staff through an email seen by the BBC, where Amazon stated that the restructuring aimed to concentrate resources on areas with the highest potential for business growth. Christoph Hartmann, Vice President of Amazon Games, mentioned in the email that the company is actively recruiting for other positions within its gaming division.
The broader tech industry has also seen a significant number of job cuts in 2023, with Amazon itself reducing its workforce by more than 25,000 positions.
Christopher Dring, head of gaming news site GamesIndustry.biz, attributes the current wave of job losses in the gaming industry to the substantial hiring that occurred at the onset of the pandemic in 2020. With people turning to video games for entertainment and connection during lockdowns, there was a surge in game sales, leading to expansions in game studios and mass hiring.
However, as lockdowns eased, game sales slowed down, and rising inflation contributed to the industry’s challenges. Dring notes that companies overspent during the pandemic, and the current job cuts represent a necessary correction as companies strive to control costs.
Mike Rose, head of gaming publisher No More Robots, explains that many firms in the gaming industry are now facing the need to reduce costs after spending more money than they generated from sales. He points out that several big studios hired talent during the pandemic, and while their projects are coming to fruition, the sales figures may not meet expectations.
Despite the job cuts and industry challenges, 2023 has been a banner year for gamers, with numerous highly rated games, including Baldur’s Gate 3, Zelda: Tears of the Kingdom, Spider-Man 2, and new entries in beloved franchises like Super Mario and Sonic the Hedgehog.
The job cuts in the gaming industry are seen as a consequence of the massive expansion and hiring during the pandemic, with companies now readjusting to align with market conditions and control costs.