Layoffs continue at Twitch. In a letter published this Wednesday and addressed to its employees, the live video streaming platform, owned since 2014 by Amazon, confirmed that it is reducing its workforce by 35%, or around 500 positions, worldwide.
At the origin of these layoffs, the difficulty of the platform to generate profits. Every month, more than 1.8 billion hours of content are broadcast on Twitch, but the costs of keeping the service running smoothly are too high. “Unfortunately, despite our efforts, it has become clear that our organization is still far too large in relation to our growth,” explains its president, Dan Clancy, in the letter in question.
The company’s workforce had been calculated based on “an optimistic projection of what Twitch’s activity could be within three years” and not on its current activity, he continues. “Like many other companies in the technology sector, we will now size our organization based on the current scale of our activities and based on conservative forecasts for our future growth,” emphasizes Dan Clancy. Before detailing, without further suspense, the terms of the dismissal: “For everyone who is leaving Twitch today, I know how important it is to say goodbye to your colleagues. You therefore retain your access to Slack and your messaging until 1 p.m. (San Francisco time).
These drastic workforce reductions come as part of a broader plan of layoffs at e-commerce giant Amazon. This same Wednesday, the group announced it was cutting hundreds of jobs at Prime Video and MGM. At the start of 2023, it had already announced that it would cut more than 18,000 jobs followed by an additional 9,000 in March across all of its activities. Twitch then laid off nearly 400 people.
Internally, Twitch also had to face, in 2023, the successive departures of several senior executives from the platform such as the product director, the customer director, the Twitch content director and the revenue director, who worked on Twitch from the Amazon Ads unit. The platform’s historic general manager, Emmett Shear, also announced his departure last March. Before becoming for 72 hours the ephemeral boss of an OpenAI in the midst of a crisis.
In December, the new boss of Twitch at the time, Dan Clancy, announced the shutdown of Twitch in South Korea due to prohibitive operating costs. “Twitch operates in Korea at a loss and, unfortunately, there is no solution to make our business more sustainable in this country,” he pointed out in a blog post.
To replenish the coffers, the platform places emphasis on advertising. In April 2023, it launched a new advertising revenue sharing system with content creators to encourage them to broadcast more. It predicts that streamers affiliated with Twitch can enjoy a 55% share of advertising revenue, by scheduling three minutes of advertisements per hour.
