Amazon (AMZN)’s music streaming service, Amazon Music, is the latest division affected by CEO Andy Jassy’s cost-cutting campaign. Layoffs are hitting the tech giant’s music streaming platform after the company reported record sales for the quarter ended September. On an earnings call last month, Jassy shouted out Prime Video, saying it could become a “large and profitable business in its own right,” suggesting the company’s emphasis on its video strategy over audio.
Bloomberg reported that the cuts will be aimed at Amazon Music’s editorial and content team. Amazon did not say how many employees would be laid off. In the last year, the company has cut 27,000 jobs. Human resources and retail departments were heavily impacted in the first round, which began in November of 2022, eliminating 18,000 jobs. The cuts have proven effective as the company reported a net income of $9.88 billion for the latest quarter, up from $2.9 billion a year ago.
Amazon will continue to invest in Amazon Music, a company spokesperson told Bloomberg. Prime members saw price increases for Amazon Music’s ad-free tier, Amazon Music Unlimited, in September. (Amazon raised both individual and family plans by $1.) This followed a pattern of competitors like Apple Music, Spotify and YouTube Music, all of which raised prices around the same time.
Amazon Music and its parent department of Audio, Twitch and Games didn’t score any mentions in Amazon’s third-quarter earnings call. And the company did not disclose any financial numbers on the division. Though it seems things are quiet, some changes and executive moves were made in the past few months. In October, Steve Boom, the head of Amazon’s Audio, Twitch and Games department, announced the shut down of Amp, Amazon’s live radio app.
Boom, the vice president of Amazon Music until 2022, appointed Ryan Redington as general manager of Amazon Music in July, a newly created role. This indicated a step back for Boom from Amazon Music. Redington was part of the team that launched Amazon Music back in 2014.
It’s difficult to determine the exact reasons for these changes at Amazon Music without knowing its financial details. Still, other music streaming services became profitable after layoffs and price raises.
Rival Spotify recently reported its first quarterly profit in more than a year. The company said its price increase on Spotify Premium, layoffs at the beginning of the year, and a resurgence in ad market helped the return to profitability.