Twitch, owned by Amazon, is set to undergo a significant workforce reduction, with plans to lay off approximately 35 percent of its staff, equating to over 500 individuals. Bloomberg initially reported this development on Tuesday, and it was officially confirmed a day later through a blog post signed by CEO Dan Clancy. Employees will receive notifications via email today regarding their employment status.
“In the past year, our focus has been on establishing a more sustainable business model to ensure Twitch’s longevity. Throughout this period, we have implemented cost-cutting measures and made decisions to enhance operational efficiency,” stated Clancy. “Regrettably, despite these initiatives, it has become evident that our organizational size exceeds the necessary scale for our current business scope.”
This move follows a reduction of approximately 400 employees in 2023 and Twitch’s decision to discontinue its operations in Korea. Bloomberg’s earlier report highlighted concerns about Twitch’s ongoing losses, as the platform has struggled to achieve profitability nearly nine years after its acquisition by Amazon for nearly $1 billion. The operational costs of sustaining the platform are substantial, especially considering its support for approximately 1.8 billion hours of live video content each month. A similar financial challenge led to Twitch’s withdrawal from South Korea, with CEO Dan Clancy noting that costs there are “ten times more expensive” than in other countries.
Towards the end of the previous year, the company experienced a significant exodus of key executives, including the chief product officer, chief customer officer, chief revenue officer, and chief content officer. Dan Clancy, who took over as CEO in March 2023, replacing co-founder and CEO Emmett Shear, has been at the helm for less than a year.
In efforts to enhance profitability, Twitch has undergone changes in its advertising strategies and streamer compensation methods in recent years. The platform, boasting over 50,000 partner creators in 2022, has received positive feedback from many for CEO Dan Clancy’s hands-on approach and attentiveness to their concerns.
Meanwhile, Twitch’s parent company, Amazon, has been actively pursuing cost-cutting measures, resulting in the layoffs of 27,000 employees over the past two years, including 9,000 in 2023. This aligns with a broader trend in the tech industry, where major players like Google, Meta, Spotify, Epic Games, Unity, and others experienced substantial workforce reductions last year.