Twitch to lay off 500 employees

Twitch, the livestreaming platform owned by Amazon, is reportedly set to reduce its workforce by 35%, which equates to nearly 500 employees, according to Bloomberg. The company is expected to announce this reduction later this week.

This marks another setback for the already troubled company, which last year saw staff cuts, leadership changes, increased operating costs, and community unrest. After Twitch co-founder and longtime CEO Emmett Shear passed leadership to current CEO Dan Clancy, the company laid off 400 workers.

Amazon later cut another 180 positions when it ceased operations of its Crown channel, Amazon-controlled Twitch programming, and disbanded its Game Growth group which had been created to assist gaming creators in marketing themselves.

Furthermore, Twitch recently revealed plans to halt service in South Korea, among the world’s largest esports markets, due to extremely high network fees. CEO Clancy wrote in a blog post that Twitch had been operating at a significant loss in Korea and saw no viable course to sustainable operation.

Despite an explosion in users during pandemic lockdowns, Twitch continues to struggle to generate profit. Its strategy shift to focus on ad revenue has caused tension among viewers and streamers, and the company remains unprofitable nearly ten years after its acquisition by Amazon, as per Bloomberg. Several high-ranking executives, including its chief revenue officer, departed Twitch in December.

Twitch incurs considerable operating costs to support large-scale livestream content. In a 2022 blog post, Clancy indicated that each high-traffic streamer on Twitch costs the company about $1,000 per month, based on Amazon Web Service’s interactive video rates.