Twitch to Lay Off 500 Employees, Nearly 35% of Workforce

Twitch, the live streaming platform owned by Amazon, is set to dismiss at least 500 employees, which is approximately 35% of its workforce, according to sources familiar with the matter cited by Bloomberg. This latest round of layoffs adds to the company’s list of job cuts. The news comes after several high-level executives left the company a few months ago, including the director of product, the director of customer service, the director of content, and the director of revenue, who worked in the advertising unit.

Twitch executives have communicated that managing a large-scale website that supports 1.8 billion hours of live content per month is enormously expensive, despite Twitch relying on Amazon’s infrastructure. In addition, last December, Twitch CEO Dan Clancy shared that the company would no longer operate in South Korea, as costs were “excessively high.”

In recent years, Twitch has increasingly focused on advertising. Nine years after Amazon acquired the company, the business is still not profitable. Since Twitch CEO Dan Clancy took office in March 2023, he has launched a charm offensive across the country to mend relationships with gaming celebrities who make a living streaming on Twitch.

Many of them were unhappy with Twitch’s original approach to ads, although the company modified it after receiving criticism. Streamers have praised Clancy’s willingness to listen to their concerns after years of complaints that the service was out of touch with its users.

However, the new boss has struggled to contain losses. Twitch carried out two rounds of layoffs in 2023, cutting more than 400 positions. In 2022, Amazon initiated its largest corporate job cut in history, extending to 27,000 positions throughout the company, and continued in October with a new round of cuts in its music section.

The executives at Twitch have stated that the company is facing enormous expenses due to the massive volume of content it supports. The company has been trying to focus on advertising to increase revenue, but even after nine years since Amazon’s acquisition, the business is still not profitable. The recent layoffs could be a sign that Twitch is struggling to find a way to become profitable.