Twitch will retrench 35 percent of its employees

Twitch, under Amazon’s ownership, is set to undergo a significant workforce reduction, with plans to lay off more than 500 employees, constituting 35 percent of its workforce. Twitch CEO Dan Clancy confirmed the news in a blog post, stating that the company has been working diligently over the past year to establish a more sustainable business. Despite implementing cost-cutting measures and efficiency decisions, Twitch acknowledges that its organizational size remains excessive for its business scale.

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The decision follows a reduction of approximately 400 employees in 2023 and Twitch’s discontinuation of operations in Korea. Concerns about Twitch’s ongoing financial losses, coupled with its failure to achieve profitability nine years after Amazon’s acquisition for nearly $1 billion, are cited as reasons for the layoffs. The platform supports a colossal 1.8 billion hours of live video content each month, contributing to substantial operational costs. The move to exit South Korea was driven by the high operational expenses in the region, described by CEO Dan Clancy as “ten times more expensive” than other countries.

Towards the end of the previous year, key executives, including the chief product officer, chief customer officer, chief revenue officer, and chief content officer, departed the company. CEO Dan Clancy, who assumed the role less than a year ago, succeeding co-founder Emmett Shear in March 2023, has been addressing the platform’s financial challenges.

Despite these measures, Twitch continues to support a large creator community, with over 50,000 partner creators in 2022. The platform has revamped its advertising approach and payment structure for streamers in recent years under Clancy’s leadership. While Amazon, Twitch’s parent company, has been engaged in a cost-cutting initiative, with significant layoffs in the past two years, the broader tech industry has witnessed large-scale layoffs at companies like Google, Meta, Spotify, Epic Games, Unity, and others throughout the previous year.