Amazon has started laying off employees across a variety of divisions, including its experimental units such as the Luna cloud gaming. According to new insider reports, the company is aiming to cut approximately 10,000 jobs and has already started culling its workforce earlier this week. The development comes just two years following Amazon's ambitious announcement of the Luna cloud gaming service.
The Seattle, Washington-based conglomerate saw over half of its $1.9 trillion market cap evaporate since Andy Jassy took the reins of the company from founder Jeff Bezos in the summer of 2021. But Amazon's downward spiral isn't necessarily tied to a change in leadership as much as it simply dovetails with the overall stock market trends, with many retail and institutional investors now anticipating a recession in 2023 and thus contributing to the overall bearish perception of the current market. Faced with that outlook, Jassy has been aggressively cutting costs at Amazon ever since he was appointed CEO.
The downsizing efforts have now reportedly reached the Amazon Luna division, as well as the Alexa team. While the cuts are ongoing, their planned extent has yet to even be communicated internally, which is said to have frustrated some staffers. Amazon doesn't provide a detailed workforce breakdown in its financial reports, so the current size of the Amazon Luna unit is equally unclear. Going by incomplete LinkedIn data, the company's game-related divisions currently have a couple of thousand employees, so Luna's total workforce might only be in the hundreds.
Amazon's cuts to its cloud gaming division come at a time when many industry watchers are skeptical about its overall prospects. More than a year before Google decided to give up on its rival service, there were concerns that Amazon Luna is the next Stadia in terms of lackluster value proposition and limited growth potential. And though the company's now staring down a grim market outlook, even these five-digit layoffs will barely put a dent in its global workforce, which is currently 1.6 million strong, according to its Q3 2022 earnings report.
So, while the early impressions of Amazon Luna were largely positive and despite the fact that the service's channel-based business model still appears to be more sustainable than that of Google Stadia, the newly reported job cuts raise many questions about its future. Especially given how the current CEO has already developed a bit of a reputation for frugality and cost-efficiency prioritization.
All this market uncertainty also means that it might be a while before Amouranth's big investment in Amazon—which she labeled as "free money"—pays off.
Source: CNBC