Amazon (AMZN) and BlackRock (BLK) unveiled new rounds of job cuts on Wednesday, joining the wave of tech and financial giants moving to trim head counts. Amazon is notably laying off hundreds of staff members from Prime Video, MGM Studios, and Twitch.
Yahoo Finance's Josh Schafer, Pras Subramanian, and Madison Mills break down the details.
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Editor's note: This article was written by Angel Smith.
Video Transcript
JOSH SCHAFER: It seems that lots of corporate America is making slimming down their workforce part of their New Year's resolution. Amazon and BlackRock both announcing staff cuts today. Amazon announcing cuts in its studios unit as well as cuts coming at Twitch, which Amazon owns. That is the streaming platform. They stream most popularly, I would say, video game streamers and things like that over on Twitch.
I think at a high level, we're starting another year, it's January again, and we're talking about tech layoffs and sort of wondering if that's going to spiral into broad-based layoffs in the labor market. That's sort of what I'm thinking about last year. If you remember January 1023, it was kind of a similar story. OK, a couple companies rightsizing, we're wondering if everything's going to turn south. It didn't last year. Just a couple headlines for now, not really broad-based layoffs that we're seeing across the labor market, but perhaps something to watch moving forward.
MADISON MILLS: Definitely something to watch, especially when you think about BlackRock, because they noted that this is definitely a direct result of the switch to passive versus active investing, which I found so interesting. Are we starting to see important figures on Wall Street embrace this idea that passive investing is winning out on a lot of retail investors, and that's leading to less of a need for them to have as much staff on hold?
PRAS SUBRAMANIAN: The Twitch stuff really interesting there, because I thought that business was really successful. They paid out $1 billion in fees to their streamers. But I guess high overhead costs, high technology costs not going to work for them. And they kind of got to slim down.
And I think you're right, Josh. I think this is the beginning of another wave of layoffs. I mean, just right when we thought the end of the year happened, fresh slate, no. More layoffs, more layoffs.
MADISON MILLS: I don't know, though, because I feel like-- I was listening to Dana Pederson talking about this earlier today, an economist. And she was saying that if you feel like the economy is really bad if your industry is impacted. So I feel like for us, media layoffs happen literally every day. So for us, maybe it feels like this is going to start to be a bigger thing. But I don't know, it feels a little bit idiosyncratic still to me. I guess we'll have to see.
JOSH SCHAFER: Initial jobless claims, our favorite-- our favorite indicator in that case, staying right about flat, at about 210,000 per week, Pras.
