Twitch to cut one-third of workforce

Sources speaking to Bloomberg said the cuts could hit up to 500 staff, or 35% of Twitch’s workforce, and could be officially announced today.

Twitch began as a game streaming service, but has grown to incorporate many types of live streaming – from reading books to lounging in hot tubs.

Despite these changing behaviours, and massive growth during pandemic lockdowns, Twitch has historically struggled to turn a profit. In fact, it faces high costs to support the scale of streaming it offers to viewers: each high-volume streamer costs the platform about $1,000 a month, according to CEO Dan Clancy in a 2022 blog post.

At the time Clancy was president of the company, but took over as CEO last year.

The streaming service, which Amazon acquired in 2014 for $1 billion, has had a rocky 12 months. It laid off 400 employees in March 2023, part of Amazon’s own mass layoffs last year, and a further 180 in November when Amazon closed its Crown channel on the service.

The company also closed its service in Korea in December, calling the running costs “prohibitively expensive.”

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Computing says:

While we may be past the days of thousands of dismissals at tier one vendors like Amazon, Alphabet and Microsoft, the market hasn’t improved for smaller firms. Twitch is just the latest company to announce double-digit-percentage job cuts, joining the likes of Xerox (15% job losses) and Unity (25%) – and that’s just from the last six days.

Many of the professionals who lost jobs last year went to tier two and three players, who were still hiring. Unfortunately for them, that now seems to have gone into reverse.

We can’t blame this entirely on the rough macroeconomic situation; all of the above companies had a particularly difficult 2023, defined by poor business decisions, so it’s difficult to say yet whether this is an emerging trend or just a nasty coincidence.