According to reports from Bloomberg, Twitch, the popular livestreaming platform owned by Amazon, is about to undergo another wave of layoffs. It is estimated that 35% of the company’s staff, which amounts to around 500 employees, will be affected by this decision, with an announcement expected to be made as early as this week.
TechCrunch reached out to Twitch for comment, but has not received a response yet.
This is not the first time the company has faced a significant reduction in its workforce. Last year, Twitch underwent a series of job cuts due to changes in leadership, increasing operating costs, and dissatisfaction within the community. After Twitch co-founder Emmett Shear stepped down and was replaced by current CEO Dan Clancy, 400 employees were laid off. Later, another 180 jobs were eliminated when Amazon shut down its Crown channel and discontinued its Game Growth group, which was meant to assist gaming creators with marketing.
The company also recently announced its decision to shut down its operations in South Korea, one of the biggest esports markets in the world. In a blog post addressing this decision, Clancy stated that Twitch has been operating at a loss in Korea and that there was no feasible way to continue running the platform in a sustainable manner.
Despite its immense popularity – especially during the pandemic-induced lockdowns in recent years – Twitch continues to struggle with generating profits. Its focus on ad revenue has been a source of controversy amongst viewers and streamers, but has not been successful in making the company financially stable. Bloomberg reports that even after being acquired by Amazon almost a decade ago, Twitch is still operating at a loss. In December, several high-ranking executives left the company, including the chief revenue officer.
One of the major reasons for Twitch’s financial challenges is the high cost of supporting livestream content on such a large scale. In a blog post from 2022, Clancy revealed that each popular streamer on Twitch costs the company an average of $1,000 per month, mainly due to the expensive rates of Amazon Web Services for interactive video streaming.
“Delivering high definition, low latency, always available live video to nearly every corner of the world is expensive,” Clancy wrote.
The truth is, maintaining a hugely popular platform like Twitch – with its vast viewership – is an expensive affair. However, it remains to be seen how the company plans to turn its fortunes around and achieve sustainable profitability in the future.
