Amazon (AMZN)’s streaming and studio units are kicking off 2024 with a leaner team than last year, continuing a cost reduction theme championed by the tech giant’s CEO Andy Jassy since late 2022. In an internal email today (Jan. 10), Mike Hopkins, senior vice president of Prime Video and Amazon MGM Studios, announced the two units are cutting “several hundred” jobs as part of an effort to produce more film, TV and live sports programs in the long run.
“Our industry continues to evolve quickly and it’s important that we prioritize our investments for the long-term success of our business,” Hopkins said in today’s. “We’ve identified opportunities to reduce or discontinue investments in certain areas while increasing our investment and focus on content and product initiatives that deliver the most impact.”
The layoffs represent a small percentage of the Prime Video and Amazon MGM Studios staff. When Observer reached out to Amazon about which positions are being eliminated and which ones are being prioritized, the company didn’t comment beyond Hopkins’s statement. Amazon also didn’t respond to a question about the content and product initiatives Hopkins touted in his email. IndieWire reported the layoffs were partially informed by carryover issues created by Amazon’s acquisition of MGM in 2022.
Amazon closed its $8.5 billion acquisition of MGM Studios in March 2022. Through MGM, Amazon recently made a deal with board game company Games Workshop to work on film and TV projects related to its popular miniature wargame, Warnhammer 40,000.
Prime Video is expected to launch an ad-supported default subscription plan at the end of this month (Jan. 29), marking the first time Amazon Prime members will have to pay extra for an ad-free experience—an increasingly standard offering in the streaming industry. Subscribers will have to pay an extra $3 a month on top of the $14.99 baseline plan to go ad-free. Amazon announced the change in September 2023. At the time, CEO Jassy promised that, even with ads, Prime Video will have “meaningfully fewer ads than linear TV or other streaming TV providers.”
Several streaming services, including Netflix, are raising prices for their ad-free plans in hopes to draw more new subscribers to their more affordable ad-supported plans and potentially increase revenue.
Amazon is expected to report financial results of the December quarter and full 2023 early next month. Investors will hear how Jassy’s aggressive cost-cutting measures have worked out for the company so far.