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Amazon’s Twitch to Cut 500 Employees, About 35% of Staff

Amazon’s Twitch to Cut 500 Employees, About 35% of Staff

(Bloomberg) -- Amazon.com Inc.’s livestreaming site Twitch is cutting 35% of its staff, or about 500 workers, Twitch chief executive officer Dan Clancy said in a blog post Wednesday morning. The layoffs are the latest in a series of job reductions there.

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The cuts, which Bloomberg News earlier reported on Tuesday, come amid concerns over losses at Twitch and after several top executives left the company in the span of a few months.

“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,” Clancy wrote in the blog post. “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.”

Running a large-scale website supporting 1.8 billion hours of live video content a month is enormously expensive, despite Twitch’s reliance on Amazon’s infrastructure, company executives have said.

The business also remains unprofitable more than nine years after Amazon’s acquisition of the company, according to people familiar with the company’s finances who asked not to be identified discussing private information. Twitch has increased its focus on advertising in recent years, and has worked to dramatically cut expenditures. In December, Clancy said the company would cease operations in South Korea, where costs were “prohibitively expensive.”

“This decision, while incredibly difficult and painful, is necessary to ensure that we can continue to serve our streamers sustainably without impacting their ability to support their careers on Twitch,” Clancy said in the blog post Wednesday. He added that Twitch had paid out more than $1 billion to streamers in 2023.

In the final months of 2023, several top executives announced their departures, including Twitch’s chief product officer, chief customer officer and chief content officer. Twitch also lost its chief revenue officer, who worked on Twitch from within Amazon’s Ads unit. The former executives all declined to comment.

“It’s always bittersweet when talented leaders move on to pursue new opportunities,’’ a Twitch spokesperson said at the time. “We are incredibly grateful for their contributions to Twitch and our community, and wish them all the best.”

Since he took the position in March 2023, Clancy has been on a cross-country charm offensive to mend relations with the gaming celebrities who make a living streaming on Twitch. Many of them chafed at Twitch’s original approach to ads, which the company reworked after criticism. Streamers have praised Clancy’s desire to listen to their concerns after years of complaints that the service was out of touch with its users.

The new chief has struggled to stem losses, however. Twitch undertook two rounds of layoffs last year, cutting over 400 positions, part of wider job reductions at Amazon. Like other tech companies, Clancy said, Twitch's reduced size is based on the business’s scale right now and "conservative predictions of how we expect to grow in the future."

Amazon initiated its biggest-ever corporate job cuts in 2022, which it expanded to 27,000 positions across the company. It continued in October with a new round of cuts to its music division, which encompasses the company’s audio streaming platform and digital storefront for songs.

(Updates with company comments beginning in first paragraph.)

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