Live-streaming site Twitch is expected to announce job reductions of around 35% of its staff – roughly 500 people – in its latest round of job cuts.
The site, owned by Amazon.com Inc. has had a tough couple of years, from criticism towards their ad approach to significant layoffs and departures across 2023.
The Latest In Twitch Layoffs
The last few months of 2023 saw several top executives announce their departure from Twitch. This included the Chief Product Officer, Chief Customer Officer, and Chief Content Officer.
The news came after 400 employees were laid off back in March 2023, with a Twitch’s Chief Executive Officer Dan Clancy stating at the time:
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“Like many companies, our business has been impacted by the current macroeconomic environment, and user and revenue growth has not kept pace with our expectations. In order to run our business sustainably, we've made the very difficult decision to shrink the size of our workforce”.
So far Twitch has declined to comment on this latest round of job cuts, but it has been reported that the move has been designed to stem further losses down the line.
Twitch Costs “Prohibitively Expensive”
Last December, Clancy announced that the company would shut down business operations in South Korea owing to it being “prohibitively expensive” and unsustainable to continue.
Despite operating costs being significantly higher in South Korea, Twitch has felt this challenge all over the globe. Supporting 1.8 billion hours of live video content is expensive, even with Amazon’s infrastructure to rely on.
In fact, almost a decade after Amazon’s acquisition of the company, it’s reported that the business remains unprofitable.
Increased Focus On Ads
These money woes led to Twitch implementing an increased focus on ads. However, this sparked a huge backlash and mass exodus of gamers and gaming celebrities, who make a living by streaming on the site.
Their issue? That the proposed ad strategy would restrict the size and type of adverts they use, which would significantly reduce how they generate income.
Under Clancy’s guidance, Twitch heard the criticism, reversed the bulk of new rules, and extended an olive branch to streamers in the form of listening to their concerns. At the time a spokesperson stated:
“We want to work with our community to create the best experience on Twitch and to do that we need to be clear about what we're doing and why we're doing it. We appreciate your feedback and help in making this change.”
With the live-streaming site struggling to make operations work overseas, and now unable to rely on meaningful ad revenue to bolster profits, it would appear that these latest round of layoffs is the next cost-saving strategy.