Twitch, the video game streaming platform acquired by Amazon for nearly $1 billion a decade ago, is laying off more than 500 employees as the company tries to make the hugely expensive division profitable.Thank you for reading this post, don't forget to subscribe!
Twitch CEO Dan Clancy said in an email to employees that even with cost cuts and increased efficiency, the platform is “still meaningfully large given the size of our business.”
“For quite some time the organization has been shaped based on where we optimistically expect our business to be in 3 or more years, not where we are today,” Clancy wrote.
Amazon purchased Twitch Interactive in 2014 for $970 million as it was looking for a way to participate in the growth of video gaming as an online spectator sport.
Twitch is a multi-channel online network built for a generation of video gamers who love watching some of the world’s best gamers as many watch professional sports.
Last month, San Francisco-based Twitch said it was withdrawing from the South Korean market due to expensive network fees. Clancy said at the time that the network fees the company was paying South Korean internet operators were 10 times higher than in most other markets. He did not provide specific numbers to support such claims.
“As you all know, we have worked hard over the past year to run our business as sustainably as possible,” Clancy wrote. “Unfortunately, we still have work to do to get our company right and I’m sorry to announce that we are taking the painful step to reduce our headcount at Twitch by more than 500.”
Amazon has cut thousands of jobs after increasing hiring during the pandemic. In March, Amazon announced it planned to lay off 9,000 workers. He was among the 18,000 employees the tech giant said it would lay off in January 2023.
This week, jobs are being cut elsewhere in the company.
Amazon is cutting several hundred positions at its Prime Video and MGM Studios units. Mike Hopkins, senior vice president of Prime Video and Amazon MGM Studios, said in a note to employees that the company is boosting investments in the areas with the highest impact while holding back on others.