Amazon-owned Twitch is preparing to lay off 35 percent of its employees or a little over 500 people. The news was first reported by Bloomberg on Tuesday and confirmed a day later by Twitch in a blog post signed by CEO Dan Clancy. Employees will learn today via email whether they are or aren't 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," he wrote. "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 move follows a headcount reduction of around 400 people in 2023 and Twitch's decision to cease operations in Korea. As Bloomberg reported earlier, the move comes amid concerns over losses at Twitch, which has failed to become profitable nine years after Amazon acquired it for nearly $1 billion. The costs of running the site are huge, given that it supports around 1.8 billion hours of live video content a month. A similar issue forced Twitch to leave South Korea, though CEO Dan Clancy said costs there are "ten times more expensive" than other countries.
Near the end of last year, several key executives departed the company, including its chief product officer, chief customer officer, chief revenue officer and chief content officer. Clancy himself has been CEO less than a year, as he replaced co-founder and CEO Emmett Shear in March of 2023.
In attempts to boost profitability, Twitch has reworked the way it does advertising and pays streamers in recent years. The site had over 50,000 partner creators back in 2022 and many have reportedly praised Clancy for using a more hands-on approach and listening to their concerns.
Parent Amazon has been on a cost-cutting mission, having laid off 27,000 employees over the last two years, including 9,000 in 2023. That's part of a downturn across tech companies, with large-scale layoffs last year at Google, Meta, Spotify, Epic Games, Unity and others.
Update, January 10 2024, 10:13AM ET: This story has been updated to reflect the fact that Twitch has now confirmed the layoffs, which were first reported by Bloomberg.