Twitch, the livestreaming platform owned by Amazon.com Inc., is reportedly preparing to reduce its workforce by 35%, approximately 500 employees, as part of ongoing efforts to streamline operations.
These potential cuts, expected to be announced imminently, coincide with concerns about financial deficits at Twitch and a series of departures of key executives over the past few months, reported CNBC.
Managing a platform that sustains 1.8 billion hours of live video content each month entails significant expenses, despite Twitch relying on Amazon’s infrastructure, as highlighted by company executives.
In a December blog post, Twitch CEO Dan Clancy mentioned plans to halt operations in South Korea due to exorbitant operational costs. As a response to financial challenges, Twitch has notably amplified its emphasis on advertising in recent years.
After nine years under Amazon’s ownership, the business still operates at a loss, revealed CNBC. By the end of 2023, multiple high-ranking executives, including Twitch’s chief product officer, chief customer officer, and chief content officer, departed.
Additionally, Twitch lost its chief revenue officer, who was previously part of Amazon’s Ads unit. A Twitch spokesperson expressed gratitude for their contributions while acknowledging the bittersweet nature of their departures, which the former employees declined to discuss.
“It’s always bittersweet when talented leaders move on to pursue new opportunities. We are incredibly grateful for their contributions to Twitch and our community, and wish them all the best,’’ a Twitch spokesperson said at the time.
Since assuming the role in March 2023, Clancy has endeavoured to repair relationships with gaming celebrities reliant on Twitch for their livelihood. These figures had previously expressed dissatisfaction with Twitch’s initial advertising approach, prompting the company to rework its strategies following criticism.
Clancy’s receptiveness to streamers’ concerns, after years of complaints about the service's disconnection from its user base, has been praised. However, despite these efforts, the new leadership has faced challenges in curbing financial losses.
Twitch underwent two rounds of layoffs in the previous year, eliminating over 400 positions, as part of broader workforce reductions at Amazon. In 2022, Amazon initiated its most extensive corporate job cuts, affecting 27,000 positions company-wide.
In October of the same year, it further trimmed roles in its music division, encompassing the company’s audio streaming platform and digital song storefront.