Twitch is ON FIRE! Amazon Lays Off 35% of Staff?!

Twitch is being GUTTED. Another 35% of their staff have been cut loose by Amazon, and we really have to wonder what the war forward is for the money-losing streaming site. Then we talk about their ever-changing nudity policy again. Oh DEER!

Additional Context:
Twitch, the Amazon-owned livestreaming platform, has recently announced a significant reduction in its workforce. Approximately 500 employees, constituting about 35% of the company’s staff, are being let go. This decision is part of Twitch’s ongoing efforts to “rightsize” the organization. The CEO of Twitch, Dan Clancy, acknowledged that the staffing strategy was overly optimistic, based on expectations of where the business would be in the future, rather than its current state. This reduction follows previous layoffs in 2023, when about 400 employees were let go.

The company has been grappling with various challenges, including high operating costs and difficulties in turning a profit. Despite its popularity and a surge in usership during the pandemic, Twitch has struggled financially. The platform faces steep costs to support live streaming content at a large scale, with high-definition, low-latency video delivery around the world being notably expensive. In a blog post, Clancy mentioned that each high-volume streamer on Twitch costs the company around $1,000 per month, primarily due to Amazon Web Services’ interactive video rates.

Furthermore, Twitch’s recent move to prioritize ad revenue hasn’t been as successful as hoped. The company still hasn’t turned a profit nearly a decade after being acquired by Amazon. Several executives left Twitch in December, and the company also announced plans to shut down its service in South Korea due to prohibitively high network fees, despite the country being one of the largest esports markets.

This round of layoffs is part of a broader trend in the tech industry, with many companies resizing their organizations in response to current business scales and conservative growth predictions. Twitch’s CEO expressed regret over the layoffs and their impact on the staff but emphasized the necessity of the decision to ensure sustainable operations and support for streamers on the platform. Affected employees are being informed about their severance packages, with the details varying by country.

These developments at Twitch signify a challenging phase for the company as it navigates financial pressures and strives to establish a more sustainable business model​​​​.

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