Twitch, the popular live-streaming platform owned by Amazon, is reportedly planning to lay off 35% of its employees, which amounts to around 500 people. Ravzgadget reported that the news comes after a previous reduction of around 400 employees in 2023 and Twitch’s decision to cease operations in Korea.
While the official announcement of the layoffs is yet to be made, concerns over the company’s financial losses are said to be the driving force behind this decision.
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Since Amazon acquired Twitch for nearly $1 billion nine years ago, the platform has struggled to turn a profit. The site’s running costs are substantial, especially considering that it supports approximately 1.8 billion hours of live video content every month.
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These financial challenges were also a major factor in Twitch’s departure from South Korea, with CEO Dan Clancy stating that the costs of operation in the country were “ten times more expensive” than in other nations.
Furthermore, Twitch has experienced a series of executive departures in recent times. Key figures such as the chief product officer, chief customer officer, chief revenue officer, and chief content officer all left the company towards the end of last year.
Clancy took over as CEO in March of 2023, replacing co-founder and CEO Emmett Shear.
To improve profitability, Twitch has made changes to its advertising methods and streamer compensation in recent years. The platform had over 50,000 partner creators in 2022, and many of them have praised Clancy for his hands-on approach and willingness to listen to their concerns.
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It is worth noting that Twitch’s parent company, Amazon, has been implementing cost-cutting measures of its own. Over the past two years, Amazon has laid off 27,000 employees, including 9,000 in 2023.
This downsizing trend is not unique to Amazon, as several other tech companies, including Google, Meta, Spotify, Epic Games, and Unity, have also undergone significant layoffs recently.
While the specific details of the upcoming layoffs at Twitch are yet to be revealed, it is clear that the company is taking steps to address its financial challenges and streamline its operations.
The impact of these layoffs on the platform’s future remains to be seen, but it is hoped that they will contribute to a more sustainable and profitable business model for Twitch.
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