Amazon's Twitch Livestreaming Platform To Lay Off Another 500

This report has been updated to reflect Amazon's official announcement of Twitch layoffs.

Amazon-owned livestreaming platform Twitch is laying off 500 employees, on top of 400 let go last March and 180 let go in late 2023 when Amazon Games shut down its Crown channel on Twitch.

The latest cuts represent about 35% of Twitch’s workforce.

“I know many of you are wondering why this is happening," Twtich CEO Dan Clancy wrote in a memo to staff on Wednesday. "Over the last year, we’ve been working to build a more sustainable business so that Twitch will be here for the long run and throughout the year we have cut costs and made many decisions to be more efficient. Unfortunately, despite these efforts, it has become clear that our organization is still meaningfully larger than it needs to be given the size of our business.  Last year we paid out over $1 billion to streamers. So while the Twitch business remains strong, for some time now the organization has been sized based upon where we optimistically expect our business to be in 3 or more years, not where we’re at today.”

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Acquired for $970 million in cash by Amazon back in 2014, Twitch is still unprofitable, according to Bloomberg.

Twitch, which is best known for its focus on live gaming streams, but has also has expanded its content beyond that, experienced a slowdown after seeing a surge in users and viewership during the pandemic. As of October 2023, the platform had about 6.89 million active streamers, down from a peak of 9.89 million in January 2021, according to Statista.

In 2022, Twitch began prioritizing ad revenue and instituting advertising and streamer monetization policies that proved unpopular with viewers and streamers and apparently failed to sufficiently boost revenue.

Amazon also recently announced that it will shut down Twitch in the major esports market of South Korea as of Feb. 27, saying that “prohibitively expensive” network costs and insufficient revenue had resulted in significant losses there.

Walker Jacobs, Twitch's chief revenue officer and managing director of sports for the Amazon Ads unit, left the company in December and was just named global chief revenue officer and U.S. president at sports streamer DAZN. Chief Customer Officer Doug Scott and Chief Content Officer Laura Lee also recently announced their departures from the company.

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