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Entertainment Industry Enters Age of Austerity

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Almost every major media tech company you can think of is shedding jobs so, rather than wondering which companies are laying off staff, it’s probably easier to ask, "Who’s hiring?" 

More than 260,000 global technology-sector employees were laid off in 2023 from 1186 companies, some 100,000 more than in 2022, according to data compiled by the website Layoffs.fyi. That compares to 154,336 employees made redundant in 2022. 

The most recent is Amazon which has announced job cuts in Prime Video and MGM Studios divisions, together with 500 staff, a third of the total, from gaming platform Twitch. 

“We still have work to do to rightsize our company,” Twitch CEO Dan Clancy said in a blog post. “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.” 

In 2023 across it wider retail business, Amazon axed another 27,000 jobs. That’s while Amazon founder Jeff Bezos made over $7.9 million an hour for every hour of the day in 2023, according to Fortune.  

Amazon is far from the only company having to issue PRs that euphemistically talk of streamlining operations or downsizing or making the most of resources.  Google made $76.3 billion in revenue in just the third quarter of 2023, according to its most recent figures, with a net income of $19.7bn yet it still felt impelled to axe a reported 600 people at the start of the new year. That’s on top of making 10,000 redundant last January. 

Google's AR team is believed to have been affected. In a post on X, the Alphabet Workers Union described the job cuts as "another round of needless layoffs." 

We’re not even at the end of January and already a quarter (1,800 people) of the workforce have been axed from game engine Unity despite three rounds of layoffs in 2023. Meanwhile media measurement firm VideoAmp is losing nearly 20% of its staff

Chip maker Qualcomm Inc, networking giant Cisco and streaming company Roku also announced job cuts recently. Microsoft slashed more labor in July 2023, adding to the 10,000 cuts it made a year ago. Niantic, the company behind "Pokemon Go" made 230 layoffs in June. Meta and Twitter/X’s billionaire owners have also eliminated human resources in the last two years. 

Epic Games, makers of Fortnite and Unreal Engine, reduced its headcount by 16% (or 830) in September, despite making billions of dollars in revenue

“For a while now, we’ve been spending way more money than we earn, investing in the next evolution of Epic and growing Fortnite as a metaverse-inspired ecosystem for creators,” wrote CEO Tim Sweeney. “I had long been optimistic that we could power through this transition without layoffs, but in retrospect I see that this was unrealistic.” 

Aside from hubris the common denominator impacting media tech is the global downturn in the economy and a consumer much more reluctant to part with cash for entertainment. 

Nowhere has this hit home harder than in the studios and streamers which have had to come to terms with the failure of a business model that inflated users over revenue. 


All the streamers are on a profit drive, and that means slashing people and entire shows from the bottom line. Disney took out 7,000 jobs with CEO Bob Iger touting a “significant transformation” for the company. WBD cut hundreds of jobs  including at CNNUnited Talent AgencyNBCUniversal, and Paramount Global laid off employees too. Netflix has not been immune. It trimmed its drama executives at the end of last year having made deeper cuts to its animation division

Ed Barton, Research Director at Caretta Research, says the entire industry is shifting from chasing raw subscriber growth to proving that premium content streaming is profitable and sustainable. “The spending on content and subscriber acquisition has to be controlled and right-sized for how much revenue they generate,” he said. “Previously streamers seemed to adopt a bit of a ‘spray and pray’ attitude to spending. As long as subs kept growing, everything was fine. Those rules no longer apply.”    

Barton thinks some companies are running out of patience. “Amazon spent nigh on a billion dollars for Twitch nine years ago and effectively bought a machine which loses money. They've had plenty of time and resources to work out how to monetise games’ streaming profitably and it's not happening. At some point management looks at the return they're getting from these platforms and decides the capital is best allocated elsewhere, such as in the highly profitable cloud computing business.”  

More Cuts Coming

The worst decline in traditional TV advertising in 15 years has resulted in fears of more job cuts at UK broadcasters on top of cuts to commissioning budgets.  

The rot has set in. Annual declines in traditional TV ad spend are predicted until at least 2028 and while broadcasters like ITV are attempting to engineer audiences and advertisers over to its streaming platform, streaming ad revenues are forecast to be worth less than a third of the £3.5bn traditional linear TV ad market by the end of this year. 

To compound the problem facing legacy broadcasters, they now face competition for ad spend from all the international streamers including Netflix and Amazon Prime. 

Don’t expect any bounce back either. The age of austerity seems here to stay. 

“The trend is long term, said Barton. “The companies which own these platforms need to demonstrate that streaming makes money without unrestrained spending on content, marketing and subscriber acquisition. The entire TV industry has bet the farm on streaming, deliberately relegating broadcast and pay TV in their content and investment priorities despite living large off the success of these markets for decades.  

“They have to prove that streaming can step up and fill this massive hole that they helped dig and if they don't, they will be smaller and less relevant businesses going forward with less power to attract the best talent and make the biggest impacts on audiences.”  

With Paramount on the block, media consolidation has not stopped. Any wave of merger and acquisition fuels job losses.  

While most redundancies are not a direct result of AI the use of intelligent automation is on the rise. Tech optimists hold that AI will create new roles for the ones it replaces but others remain fearful of being machined out of a livelihood. 

Online language app Duolingo for example cut 10% of its contractor workforce at the end of 2023 saying it would use AI to streamline content production and translations previously handled by humans. 

Barton said, “Success in streaming will be more concentrated than in TV and if you aren't one of the winning platforms, you won't be in a position to maintain a resource intensive cost base. So less people and more automation (if they can afford the transformation process) is possible though it's more likely that they will be taken out by consolidation.” 

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