Twitch, which is owned by Amazon, se is about to lay off 35% of its employees, i.e. about 500 people, Bloomberg reported, citing “people familiar with the matter.” Twitch has already laid off around 400 people last year, and has also closed its operations in Korea. The cuts could be announced as early as this week, but no details have yet been released.
This radical move is said to have taken place due to fears of financial losses. Nine years after Amazon bought it for nearly $1 billion, Twitch failed to turn a profit. The cost of running a website is huge, given that makes approximately 1.8 billion hours of live video content available per month. A similar problem forced Twitch to leave South Korea. CEO Dan Clancy said the cost in Korea was “ten times greater” than in other countries.
At the end of last year, several key managers left the company. Clancy himself has been CEO for less than a year, having replaced co-founder and CEO Emmett Shear in March 2023. In an effort to increase profitability, Twitch has overhauled the way it advertises and rewards streamers in recent years.
Parent company Amazon has embarked on a cost-cutting path, laying off 27,000 workers over the past two years, 9,000 of them in 2023. To a similar wave of layoffs also occurred last year at Google, Meta, Spotify, Epic Games or Unity.