Amazon lays off some employees in its video games unit: Read the memo

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Amazon is laying off roughly 100 employees across its video games division, an executive overseeing the unit wrote in a memo to staffers on Tuesday.

The layoffs included employees in the Game Growth group, Amazon’s San Diego gaming studio, and Prime Gaming, an offering targeted for members of Amazon’s mainstay loyalty program, Christoph Hartmann, vice president of Amazon Games, wrote in the memo. Some staffers have also been reassigned to other projects “that match our strategic focus,” Hartmann said.

“There is never a pleasant way to share this sort of news, but we are committed to treating our impacted employees with empathy and respect, and will support them by offering them severance pay, health insurance benefits, outplacement services, and paid time to conduct their job search,” he said.

The cuts come as Amazon CEO Andy Jassy has moved to rein in costs across the company. Last month, Jassy announced Amazon would lay off an additional 9,000 employees, on top of the previous round of cuts totaling more than 18,000 people. The company has also instituted a hiring freeze in its corporate workforce, and it has shuttered some experimental projects, such as a telehealth service and a sidewalk delivery robot.

On Tuesday afternoon, Amazon began notifying staffers that they were being laid off by pulling them into a meeting with human resources, according to one affected employee. This person requested anonymity because they weren’t authorized to speak on the matter.

Since its launch in 2013, Amazon Games has struggled to produce a hit despite several published projects, and the company luring top talent from the likes of Sony Online Entertainment. Amazon in 2020 released its first big-budget game, Crucible, then canceled the free-to-play shooter within a few months. A year later, Amazon released the PC game New World, which enjoyed some early success, and it sought to capitalize on the buzz by launching online action role-playing game Lost Ark last February.

Amazon’s video games division has also experienced some turnover among its top ranks. Mike Frazzini, who helped launch Amazon’s game studios, stepped down last March. And in January, John Smedley, who headed up Amazon Games’ San Diego studio, exited the company.

A spokesperson for Amazon confirmed the layoffs and the existence of the memo but declined further comment.

Here’s the full memo from Hartmann:

Hello everyone,

I want to take a moment to make you aware of some changes happening today across the Games business and outline our path forward.

It is my firm belief that we have a unique opportunity to become one of the leading publishers of high-quality gaming content that delights players for years — whether that’s creating our own games internally, publishing titles from talented developers like Bandai Namco and Crystal Dynamics, providing entertaining shows on Crown Channel, or offering great content via Prime Gaming. Delivering the best content for players is at the center of what we do, and today’s changes are aimed at focusing our teams toward that commitment.

After evaluating our current projects against our long-term goals, the Games leadership team made the difficult decision to eliminate just over 100 roles across Prime Gaming, Game Growth and in our San Diego studio, while also reassigning some employees to other projects that match our strategic focus. Each employee whose role has been eliminated should now have a live meeting scheduled this morning so we can discuss these changes directly and give each employee an opportunity to ask questions. There is never a pleasant way to share this sort of news, but we are committed to treating our impacted employees with empathy and respect, and will support them by offering them severance pay, health insurance benefits, outplacement services, and paid time to conduct their job search.

Going forward, our resources will be aligned to support our focus on content. We will continue to invest in our internal development efforts, and our teams will continue to grow as our projects progress: The New World team in Irvine will grow as we shift some resources to further support its continued development. Our studio in Montreal will continue to expand, and is making great progress on their unannounced project. And the San Diego studio will double down on the pre-production phase of their unannounced game, as that project is not yet ready for a full production size team. We will also continue expanding our publishing efforts, and we remain very active in exploring and signing new projects where we see great potential, such as our recent publishing agreement with NCSOFT. And finally, we are optimizing our retail and backend focused teams to ensure Amazon Games and Prime Gaming deliver strong value and rich experiences for our customers, and are adjusting the team sizes accordingly.

I recognize that the impact of these decisions is not just to the business, but to our teammates and friends. It never feels good to say goodbye to colleagues, and I thank you for supporting them as they work through this change. We respect this is a difficult time and that you may have questions or concerns. Your manager, L8 business leader and HRBPs are available for conversations. In addition, if you’re interested, a licensed counselor is available to speak with you by phone 24/7 through our https://inside.hr.amazon.dev/us/en/employment/time-off-compensation-benefits/benefits-global/employee-assistance-program.html (US Phone: 1-833-721-2323).

I am confident in the direction we are headed. Amazon Games has gained momentum over the past couple of years thanks to your hard work, dedication and commitment to players. We’ve launched two games and have seven more projects announced, with even more in the pipeline, in addition to the new Crown shows and Prime Gaming content we have lined up. Thank you to each and every one of you for showing up every day to make that happen. If you have questions or need to connect, please reach out to me or your team leads.

Thanks,

Christoph

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