Twitch laid off 35% of its staff, just over 500 employees, the company said in a blog post Wednesday. This is the latest round of layoffs at Amazon’s live-streaming site, which says it receives over 35 million daily visitors but has failed to turn a profit.
“I regret having to share that we are taking the painful step to reduce our headcount by just over 500 people across Twitch,” said CEO Dan Clancy in a blog post. Despite efforts to cut costs, Clancy says the “organization is still meaningfully larger than it needs to be given the size of our business.”
This is the second round of layoffs for Twitch in less than one year, as first reported by Bloomberg Monday. The parent company, Amazon, also laid off hundreds of employees working in Prime Video and MGM Studios on Wednesday. Amazon previously announced it would be injecting ads into Prime Video at the end of January to help bolster its streaming business.
Shortly after taking over as Twitch’s CEO in March 2023, Dan Clancy eliminated 400 positions. At the time, Clancy defended the layoffs saying, “Those were the right moves to help run this business long-term for creators.” Just last month, the company announced it would shut down Twitch in Korea on Feb. 27, noting that operations in the country have become“prohibitively expensive.”
Twitch has laid off more than 900 employees since Clancy took over less than a year ago. His workforce is now roughly half the size that it was a year ago, according to PC Gamer. Twitch notified affected employees Wednesday morning, and will later hold an All Staff with the rest of the company.
Creators are the main driver of Twitch’s business, but the number of streamers on the platform has stagnated in recent years. According to Twitch Tracker, the number of active streamers on the platform exploded throughout the pandemic, peaking in January 2021 at just under 10 million creators. The number of creators fell throughout 2021, and now less than 8 million people are actively streaming in 2023.
Twitch doesn’t seem to be doing enough to attract creators. The Washington Post reported in 2021 that many of Twitch’s most popular streamers make less than minimum wage. The platform attempted to attract more creators by offering its most popular streamers a 70% share of the revenue they generated in June 2023. However, reports came out that it would only apply to 2.5% of streamers, and that a 70% revenue split would drop to 50% after the streamer earned $US100k.
The reason Twitch streamers aren’t making much is because the platform has struggled to monetise in the same way competitors, like YouTube, have with advertising. It doesn’t seem like there’s much plan to change that. When Clancy took over as Twitch CEO, he went on a podcast saying he wanted to reduce ads on the platform, which was popular for viewers but not a great deal for streamers.
The streaming platform has also struggled to moderate content on the platform as well, flip flopping on its nudity policies in an erratic way. Twitch banned suggested nudity a few weeks ago to create a safer and more welcoming community, but clearly is having a hard time defining Twitch’s audience after over a decade of operation.