Amazon's Twitch to layoff 35% of workforce: Report

Amazon Twitch layoffs: Amazon.com's streaming giant, Twitch, is poised to undergo a significant workforce reduction, cutting 35 per cent of its staff, or about 500 workers, according to sources cited by Bloomberg News. The anticipated announcement could be made as early as Wednesday, as the platform grapples with continued losses despite its affiliation with Amazon.

The move comes on the heels of Twitch CEO Dan Clancy's announcement in December regarding the shutdown of operations in South Korea due to high operating costs and network fees. The platform had previously laid off over 400 employees in March 2023, following disappointing user and revenue growth.

Industry impact

The impending layoffs add to a series of job reductions across the gaming and tech sectors, reflecting a challenging year for the industry. Unity, a game engine developer, recently announced a 25 per cent workforce reduction in a "company reset."

Financial struggles

Twitch's parent company, Amazon, has faced financial challenges in maintaining the platform's operations, despite its reliance on Amazon's infrastructure. Twitch's increased focus on advertising has not been sufficient to offset the persistent losses, making the platform unprofitable nine years after Amazon's acquisition.

Executive departures

In the final months of 2023, Twitch experienced several top executive departures, including the chief product officer, chief customer officer, and chief content officer. The chief revenue officer, who worked on Twitch from within Amazon's Ads unit, also left the company.

Leadership challenges

Twitch CEO Dan Clancy, who took the position in March 2023, has been working to mend relations with gaming celebrities and address concerns within the streaming community. Despite efforts to rework the platform's approach to ads, Twitch struggled with losses and underwent two rounds of layoffs in the previous year.

If the reported layoffs materialise, Twitch will be left with approximately 930 employees, half the workforce it had the previous year. The challenges faced by the streaming platform underscore broader issues in the industry, with companies grappling to balance growth, profitability, and operational costs.