Bloomberg has reported recently that Twitch, the live streaming platform owned by Amazon, is going to cut its massive 35% staff, which is nearly around 500 employees. This is not the first time the company has fired its workers. In 2022, Twitch excluded 400 members from its staff as soon as Dan Clancy took the CEO seat by replacing the co-founder and former CEO Emmett Shear. Since then, the company has been facing its decline, resulting in raised operating costs along with community discontent.
Reasons for Layoffs
After the pandemic, Twitch has experienced a tremendous improvement in its user base, which makes it one of the most famous live-streaming platforms. However, the change of ownership wasn’t suitable for the company and over 27,000 employees have lost their jobs so far since 2022. The platform is also struggling pretty heavily to turn a profit. Furthermore, the move of prioritizing ads in the live streams received a lot of hate from both users and streamers, resulting in a greater decline. Although Amazon has owned Twitch around 10 years ago, it is still not making good profits.
The layoff of 500 employees is a step toward reducing the operational cost to ensure that there could be a significant gap between the expenditures and costs. In the later part of the year 2023, Amazon also made tremendous moves to evacuate 180 jobs after shutting down its Game Growth group, Amazon-run Twitch programming, and Crown channel. All these efforts are only toward bringing this platform back to the route to generate handsome revenue for sustainability.
Twitch in South Korea
Besides firing the employees, Twitch has confirmed that users from South Korea will no longer be able to use this live-streaming service. The primary reason for this shutdown is also the same the company is not able to generate the desired level of revenue. Further, the operational cost to stream in South Korea is very high, causing a huge decline in the total profit. Dan Clancy has recently revealed the whole story in a blog post and has clearly mentioned the whole incident with a “no path forward” compliment.
Although the official details regarding this cut-off are not made public so far, the move is expected to be taken by the next week.
Impact of Layoffs
The current move of Twitch to lay off 35% of the total employees can have significant impacts on the company both positively and negatively. The operational cost will be reduced to a great extent. Furthermore, it could be seriously easy to manage the remaining workforce to carry out vital tasks. Twitch has not yet revealed which sectors will experience the employees’ layoff, the expected departments include engineering, marketing, and sales.
On the other hand, laying off a huge figure of 500 employees will put extra pressure on the remaining workforce. The situation will become more troublesome if other workers fail to handle the critical tasks.