The Amazon division’s hefty costs keep it from being profitable.
Twitch, which is owned by Amazon, is getting ready to relieve 35 percent of its workforce, which is equivalent to a little more than 500 individuals. Twitch verified the news in a blog post that was signed by CEO Dan Clancy the next day, which was the day after the news was initially reported by Bloomberg on Tuesday. In the coming day, employees will receive an email informing them of whether or not they would be losing their jobs.
“Over the last year, we’ve been working to build a more sustainable business so that Twitch will be here for the long run and throughout the year we have cut costs and made many decisions to be more efficient,” according to him. “Unfortunately, despite these efforts, it has become clear that our organization is still meaningfully larger than it needs to be given the size of our business.”
The decision to take this action comes after Twitch made the decision to stop operations in Korea and a headcount reduction of around 400 employees in 2023. The decision comes amid concerns over losses at Twitch, which has struggled to become profitable nine years after Amazon acquired it for roughly one billion dollars. As Bloomberg reported earlier, the move comes amid these concerns concerning Twitch. Given that it is capable of supporting about 1.8 billion hours of live video material each month, the expenditures associated with hosting the website are enormous. Although Twitch’s CEO Dan Clancy stated that the costs in South Korea are “ten times more expensive” than those in other nations, the company was forced to leave South Korea due to a similar situation.
A number of the company’s most important leaders left the organization in the latter half of the previous year. These individuals included the chief product officer, chief customer officer, chief revenue officer, and chief content officer. It has been less than a year since Clancy took over as CEO of the company, having succeeded Emmett Shear, who had been the co-founder and CEO of the company.
During the past few years, Twitch has made changes to the how it handles advertising and how it compensates streamers in an effort to increase its profitability. Back in 2022, the website had more than 50,000 partner artists, and many of them have allegedly commended Clancy for taking a more hands-on approach and responding to their issues.
Over the course of the past two years, parent company Amazon has been on a quest to reduce costs, and as part of this mission, it has laid off 27,000 employees, including 9,000 in 2023. A number of technology businesses, including Google, Meta, Spotify, Epic Games, Unity, and others, cut a significant number of employees in the past year, contributing to the current trend of layoffs.