The company is now reassigning workers to projects that fit its "strategic focus", according to a report in Engadget.
"Laid off employees are already being notified, and will get severance pay, health benefits and paid time to find new jobs," the report noted.
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In an internal memo, the company said the cuts come after Amazon weighed its ongoing projects against its "long-term goals".
Amazon is only offering the 'New World' game at the moment and its move to popularise a free-to-play shooter game called 'Crucible' was shut down after just a few months.
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In March, the e-commerce giant announced to lay off another 9,000 employees in Amazon Web Services (AWS), Twitch, advertising, and HR.
In a memo, Amazon CEO Andy Jassy said that as the company concluded the second phase of its operating plan. "I'm writing to share that we intend to eliminate about 9,000 more positions in the next few weeks, mostly in AWS, PXT, Advertising, and Twitch."
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Amazon initially eliminated 18,000 positions in January and as "we completed the second phase of our planning this month, it led us to these additional 9,000 role reductions".
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