Amazon.com Inc.’s live streaming platform, Twitch, is reportedly set to undergo a significant workforce reduction, with around 35% of its staff, approximately 500 employees, expected to be affected.
The potential announcement of these cuts may come as early as Wednesday(today), marking a series of job reductions within the company.
Based on reports, this move follows concerns about financial losses at Twitch and a string of departures by several high-ranking executives over the past few months. The company’s spokesperson has chosen not to provide comments on these developments.
Despite Twitch’s reliance on Amazon’s infrastructure, the operation of a large-scale website supporting 1.8 billion hours of live video content each month incurs heavy expenses, as acknowledged by company executives. In December, Twitch’s Chief Executive Officer, Dan Clancy, revealed plans to cease operations in South Korea due to “prohibitively expensive” costs.
While Twitch has intensified its focus on advertising in recent years, the platform remains unprofitable even nine years after Amazon’s acquisition.
In the last quarter of 2023, Twitch witnessed the departure of several key executives, including the chief product officer, chief customer officer, and chief content officer. The platform also lost its chief revenue officer, who previously worked within Amazon’s Ads unit.
What you should know
- Since assuming the role in March 2023, CEO Dan Clancy has actively worked to rebuild relationships with gaming celebrities who stream on Twitch. The platform faced criticism for its initial approach to ads, leading to a revamp after user complaints.
- Although Clancy’s willingness to address streamers’ concerns has been lauded, Twitch continues to grapple with financial losses. In the past year, the platform underwent two rounds of layoffs, resulting in the elimination of over 400 positions and contributing to broader job reductions across Amazon.
- In 2022, Amazon initiated significant corporate job cuts, expanding to 27,000 positions throughout the company. Additionally, in October of the same year, further cuts were made in its music division, encompassing the audio streaming platform and digital storefront for songs.
- Twitch was originally founded by Justin Kan in 2011 as a spin-off of Justin. TV has an interesting history. Justin. tv, established in 2007 as a single channel, broadcasted Kan’s life live around the clock, pioneering the concept of ‘lifecasting.’ Amazon acquired Twitch for $970 million in cash in 2014 largely allowed the company to operate autonomously.
