Twitch, owned by Amazon, is undergoing a second consecutive year of layoffs, with the livestreaming platform set to cut its workforce by 35%. This announcement follows a year of financial concerns for the company, which has witnessed several key executives departing in recent months, as reported by Bloomberg.
In a blog post penned by Twitch CEO Dan Clancy on Wednesday, the company acknowledged the ongoing efforts to operate sustainably over the past year but expressed the need for further adjustments to align with their business goals. Unfortunately, this involves a significant reduction in staff, with over 500 employees—equivalent to 35% of the workforce—facing layoffs.
The post outlines the procedure for affected employees, indicating that individuals in the U.S., Brazil, Canada, Mexico, and Singapore will receive an email from CEO Dan Clancy notifying them of their separation from the company. Following this notification, managers will engage in one-on-one discussions with affected employees, addressing personal details such as severance packages over the next few days.
For those residing outside the mentioned countries, Chief People Officer Lauren Nunes will communicate via email, providing details specific to the layoff process in each respective location. Despite the challenging circumstances, Twitch is facilitating a thoughtful transition, allowing departing employees to retain access to communication channels, such as Slack and email, until 1 p.m. PT to bid farewell to colleagues.
Twitch, founded in 2011 and acquired by Amazon for $970 million in 2014, is a San Francisco-based livestreaming service primarily known for streaming video games. In 2022, the platform primarily attracted Gen Z and Millennial men, with around 42% of viewers aged 16 to 24 and 72% between 16 and 34, according to the Global Web Index.
Twitch’s financial troubles have been a subject of discussion, as the platform remains unprofitable despite generating $2.8 billion in revenue in 2022, according to Business of Apps. The revenue is sourced from ads, subscriptions, and viewer contributions like bits and gifts, but Twitch has faced challenges in achieving profitability over its nine-year existence, as reported by Fortune.
The platform has grappled with various controversies, including the decision to halt operations in South Korea due to prohibitive expenses, as announced on December 5, 2023. Additionally, a series of executive departures, including the chief product officer, chief customer officer, chief content officer, and the chief revenue officer, have occurred towards the end of 2023, as reported by Fortune.
Twitch’s financial struggles also manifested in the form of layoffs in 2023, with one of its original founders and former CEO, Emmett Shear, stepping down in March, and the subsequent announcement of over 400 layoffs by the company. In an effort to address financial challenges, Twitch announced changes to the revenue split for streamers in June, reducing the share for top streamers from 70% to 50%, while maintaining the original split for partnered streamers earning less than $100,000.
As Twitch navigates these financial and operational challenges, the company faces a critical juncture in its evolution, and the announced layoffs represent a significant step towards realigning its workforce and resources. The impact of these changes on the platform’s future remains to be seen, as the livestreaming giant grapples with both internal restructuring and the broader dynamics of the online streaming landscape.