Twitch Cuts 35% Staff And Over 500 People Are Now Out of Work

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Twitch Cuts 35% Staff And 500 People Are Now Out of Work

Amazon-owned streaming platform Twitch is reportedly laying off over 500 employees. It is part of a restructuring effort to “rightsize” the company, according to CEO Dan Clancy. Employees were informed of the layoffs a day before the official announcement on Wednesday. Moreover, Amazon is laying off “several hundred” individuals in its Prime Video and Amazon MGM Studios divisions (Variety).

“Today I have some incredibly difficult news to share,” Clancy wrote in a letter sent to staff on Wednesday. “As you all know, we have worked hard over the last year to run our business as sustainably as possible. Unfortunately, we still have work to do to rightsize our company and I regret having to share that we are taking the painful step to reduce our headcount by just over 500 people across Twitch. This will be a very hard day. Our service exists to empower communities to create, together, and every single one of you has played a vital role in fostering our community and furthering that mission.”

Twitch Is Cutting Of People

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This marks another round of layoffs less than a year after the platform laid off 400 employees in March. Additionally, Amazon Games, an Amazon subsidiary, cut almost 200 jobs and shuttered some games divisions in November. According to Dan Clancy, the reason behind this decision is to forge a more sustainable business.

Clancy mentioned that Twitch is still larger than necessary for its business size, despite earlier cost-cutting measures such as discontinuing the “prohibitively expensive” service in South Korea.

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He continued: “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. As with many other companies in the tech space, we are now sizing our organization based upon the current scale of our business and conservative predictions of how we expect to grow in the future.”

Increased Job Losses In The Industry

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Despite Twitch paying out over $1 billion to streamers in 2023, reflecting a robust business, the platform is undergoing major staff reductions. CEO Dan Clancy mentioned that Twitch is “still meaningfully larger than it needs to be given the size of our business,” indicating a shift towards building a more sustainable model. This move aligns with an industry-wide trend. Companies are facing the consequences of rapid expansion during the pandemic, resulting in substantial layoffs. This highlights the challenges arising from prioritizing short-term growth over long-term sustainability, impacting the workforce within the industry.

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The recent layoffs at Amazon are contributing to a notable increase in job losses in the video game industry. Unity underwent multiple rounds of layoffs in 2023, culminating in a significant reduction of 1,800 jobs in 2024. Twitch has also witnessed executive departures, starting with former CEO Emmett Shear in March. The current CEO assumed the role and subsequently engaged in efforts to regain the trust of affected streamers.

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Clancy plans to conduct a live broadcast on Twitch on Thursday at 4 p.m. EST to address the broader implications of the layoffs on the streaming community. He emphasized that Twitch remains dedicated to supporting its streamers. And, the platform is committed to maintaining its position as the premier platform for live streaming in the years ahead.

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