Twitch, the live streaming platform acquired by Amazon, is set to lay off about 500 employees, constituting roughly 35% of its workforce. Bloomberg reports, citing sources familiar with the matter, that these layoffs are part of a broader trend of employment reductions within the company.
Imminent Announcement
- Date of Announcement: Expected today, January 10.
Executive Departures
- Recent Exits: Several top executives, including the Heads of Product, Customer Support, Content, and the Revenue Officer from the advertising unit.
Operational Challenges
Twitch’s management highlights the high costs of running a large-scale website, which supports 1.8 billion hours of live content monthly. Despite relying on Amazon’s infrastructure, expenses remain substantial. Last December, Twitch CEO Dan Clancy revealed the company’s withdrawal from South Korea, citing “excessively high” costs.
Focus Shift to Advertising
Nine years post-Amazon acquisition, Twitch continues to struggle with profitability. Under CEO Dan Clancy, who took over in March 2023, there has been a concerted effort to mend relationships with gaming celebrities who earn their livelihood streaming on Twitch.
The company’s initial approach to advertisements had drawn criticism, prompting changes. Streamers have since acknowledged Clancy’s efforts to address their concerns, amidst long-standing complaints about the platform’s disconnect with its user base.
Continued Financial Challenges
Despite these efforts, Twitch struggles to stem losses. In 2023, Twitch conducted two rounds of layoffs, cutting over 400 positions. Amazon, in its largest corporate job cut to date, eliminated 27,000 positions across the company in 2022, extending to the music division with further cuts in October.
Massive Job Cuts at Twitch: A Strategic Reorganization
Twitch’s decision to lay off a third of its workforce is a significant move, reflecting the ongoing challenges in maintaining profitability and operational efficiency.
These cuts, along with the high-profile departures and strategic shifts, indicate a period of intense reorganization for the streaming giant. As Twitch navigates these changes, the impact on its community of streamers and viewers will be closely watched.