Twitch issues layoffs to over 500 staff to ‘rightsize’ its workforce

Twitch, the Amazon-owned live streaming platform, has laid off 35% of its staff, or just over 500 employees. CEO Dan Clancy said these cuts are designed to “rightsize” Twitch’s workforce.

Twitch has struggled to turn a profit since Amazon bought the service about a decade ago. Since taking over for Emmett Shear, Clancy and Twitch made major cuts to turn the platform into a sustainable business. Last year, Twitch issued two rounds of layoffs totaling about 435 employees. With today’s layoffs, Twitch cut nearly 1,000 positions in total, or roughly 50% of its staff, in the last year. Additionally, Twitch’s chief product officer, chief customer officer and chief content officer all left the company in Q4 2023.

While Twitch has expanded globally, the company is taking a closer look at unprofitable markets too. As a result, the platform plans to shut down its operations in South Korea in February 2024.

“Over the last year, we’ve been working to build a more sustainable business so that Twitch will be here for the long run and throughout the year we have cut costs and made many decisions to be more efficient. Unfortunately, despite these efforts, it has become clear that our organization is still meaningfully larger than it needs to be given the size of our business,” said Clancy in an email to employees.

“Last year we paid out over $1 billion to streamers. So, while the Twitch business remains strong, for some time now the organization has been sized based upon where we optimistically expect our business to be in 3 or more years, not where we’re at today. As with many other companies in the tech space, we are now sizing our organization based upon the current scale of our business and conservative predictions of how we expect to grow in the future.”

While it’s not clear which departments were hit hardest, these layoffs might be part of Amazon’s broader strategy. On January 29, Amazon Prime Video will launch an ad-supported tier. Amazon leadership may be looking to consolidate Twitch’s ad sales into the broader business to reduce costs.