Jack and Spike on Amazon cutting jobs from Twitch, other divisions

Amazon has eliminated hundreds of positions across its video production and distribution division, including more than 500 employees working for its livestreaming subsidiary Twitch. Amazon Prime Video and Amazon’s MGM Studios division also lost several hundred jobs.

Once the moves are finalized, Amazon will have removed more than 27,000 jobs over the past year.

According to The Associated Press, these moves being made in early 2024 are to make the “tremendously expensive division” profitable as Twitch CEO Dan Clancy wrote in an email to employees. He added that the platform “is still meaningfully larger than it needs to be given the size of our business.”

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“For some time now, the organization has been sized based upon where we optimistically expect our business to be in three or more years, not where we’re at today,” Clancy wrote.

Twitch is a multichannel online network that allows people to watch some of the best gamers in the world similar to how many people watch professional sports. Amazon purchased Twitch Interactive in 2014 for $970 million.

“On Twitch, it wasn’t just video games. It was also pretty ladies. It was also people who were gambling. Major League Gaming sporting events were all on Twitch, it was a really big deal,” Jack Stine said on The Jack and Spike Show. “The problem with Twitch is they started changing their terms of service because they wanted to attract high-level advertisers. They wanted that sweet sweet A-tier, A-rating advertisers. They wanted GM. They wanted Disney and, to get that, they had to make some concessions.”

From there, Jack noted that those types of concessions then led to the departure of talent to another service.

“No more gambling. Cut all those streams. Can’t gamble anymore. What about a nice hot tub stream? Not anymore, it’s got to be censored. You got to have more clothing on,” Otherwise, it’s considered to be indecent exposure,” Jack continued. “So, over time, a lot of the talent that went to Twitch because they couldn’t be on YouTube anymore, they decided I’m not making any money anymore. I’m not a partner there. I can’t collect donations anymore. What’s the point of this? So a bunch of guys got together and they started a platform called Kik.”

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According to CBC News, Twitch, Prime Video and MGM Studios employees in the Americas found out if they lost their jobs Wednesday, while most workers other regions were informed by the end of the week. Clancy took to his blog yesterday to state how disappointed he was when he learned this news got leaked early.

Amazon’s willingness to experiment

“Isn’t this a place where a guy like Jeff Bezos, who’s got untold amounts of money, can take a financial hit to put a platform out there like Twitch, which is a safer cleaner platform?” Spike O’Neill, co-host of The Jack and Spike Show, asked while on the air.

“What I’ve heard about Amazon’s corporate strategy is that they’re willing to try big ideas and fail rather spectacularly, right?” Laura Scott, the producer for The Jack and Spike Show, added.

Bezos has described Amazon as a place to fail dating back nearly 10 years. In a 2015 shareholders letter, Bezos stated “Amazon’s approach to experimentation, even when it leads to unsuccessful outcomes, is what fuels its innovation engine.”

In the nine years since that letter, Amazon has taken plenty of risks, especially with its entertainment divisions. The company spent $8.5 billion in 2022 to purchase MGM and quickly parlayed that purchase with another near $500 million investment in “The Lord of the Rings: The Rings of Power,” an 8-episode TV series prequel based on J.R.R. Tolkien’s books for Prime Video. MGM owned the TV rights to anything related to “The Lord of the Rings” and Middle-Earth.

Still, Jack described the situation with Twitch as a consequence of “over-policing” content.

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“Much like what conservatives say about these mega social media platforms, Twitch fell into that same habit of kicking people off that they disagreed with,” Stine said. “And unfortunately, when that happens, you end up having a deficit of talent and a deficit of people who actually want to watch your platform.”

Alongside the employee layoffs, Amazon Prime is set to increase prices for viewers who wish to remain commercial-free in a strategy both Netflix and Disney+ streaming services have previously used.

Contributing: The Associated Press

Listen to Jack and Spike weekdays from noon-3 p.m. on KIRO Newsradio, 97.3 FM. Subscribe to the podcast here.