Amazon Game Studios Faces Major Layoffs as Amazon Cuts Over 14,000 Jobs
Amazon has announced sweeping layoffs affecting more than 14,000 corporate employees, and its video game division, Amazon Game Studios, has not been spared. According to a report from Bloomberg, the cuts within the division are described as “significant,” marking one of the most substantial reductions since the studio’s formation.
In a statement from Steve Boom, Amazon’s Head of Audio, Twitch, and Games, the company acknowledged that despite its pride in past successes, a major portion of its first-party AAA game development, particularly in MMO (massively multiplayer online) projects, is being halted.
“While we’re proud of our successes in first-party AAA game development and publishing, we have made the difficult decision to halt a significant amount of our first-party AAA game development work, specifically around MMOs, within Amazon Game Studios, including making significant role reductions in our studios in Irvine and San Diego, as well as our central publishing team,” Boom stated.
BREAKING: Amazon is making "significant" cuts to its video-game division, moving away from MMOs like New World, and gutting its Irvine and San Diego development studios www.bloomberg.com/news/article...
— Jason Schreier (@jasonschreier.bsky.social) October 29, 2025 at 12:10 AM
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While the popular MMO New World was not mentioned by name, the reference to halting MMO development has raised questions about its future, as well as the broader direction of Amazon’s gaming efforts.
A separate report from The Verge revealed that the layoffs are part of a larger internal restructuring aimed at prioritizing artificial intelligence (AI) initiatives. Senior executive Beth Galetti wrote in an internal memo that Amazon is “reducing bureaucracy, removing layers, and shifting resources to ensure we’re investing in our biggest bets and what matters most to our customers’ current and future needs.”
“Some may ask why we’re reducing roles when the company is performing well. This generation of AI is the most transformative technology we’ve seen since the Internet,” Galetti explained, emphasizing that Amazon aims to “be organized more leanly” to stay competitive.
The move suggests that Amazon may be scaling back its ambitions in game development altogether. While the company has seen success with Prime Video adaptations such as Fallout and upcoming projects like Wolfenstein and Mass Effect series, it remains unclear whether Amazon will continue pursuing its long-standing goal of establishing a strong presence in the gaming industry.
The company’s decision to pivot resources toward AI development could indicate a new strategic direction that prioritizes emerging technologies over creative entertainment projects like games. Whether this marks a temporary restructuring or a full retreat from gaming remains to be seen.
What do you think? Is Amazon making the right move by focusing on AI, or is it abandoning its chance to build something meaningful in gaming?
