Things are not getting better for Twitch. To the point that Amazon’s video game streaming platform is forced to once again cut back on its workforce. A vast layoff plan which concerns a little more than a third of the company’s jobs.
“I regret having to announce that we are making the painful decision to reduce Twitch’s workforce by just over 500 people,” said Dan Clancy, CEO of Twitch, in a letter sent to employees Wednesday and published in an article on the company blog.
Costs too high
The reason is the cost of maintenance to ensure the proper functioning of the service. Now way too high. It is therefore impossible for the platform bought by Amazon in 2014 to generate any profit despite its undeniable attractiveness: 1.8 billion hours of content streamed each month, and some 31 million visitors on average per day.
Faced with these economic difficulties, Twitch, which must at the same time deal with the exodus of several of its managers, had already been forced in 2023 to cut 400 jobs. But the cataclysm occurs in February. The company was taken by surprise by the increase in internet network prices in South Korea, and decided to end its activities. At the time, it’s almost hard to believe it, as she had managed to establish herself as a leader in the land of Morning Calm.
“Over the past year, we have worked to build a more sustainable business […]we have reduced costs and made many decisions to be more efficient”, wrote Dan Clancy in his letter to employees. Before deploring that “unfortunately, despite these efforts, it (has) become obvious that [leur] organization is still much larger than would be necessary given the size of [l’] business”.
Prime Video and MGM Studios also affected
But within the Amazon group, Twitch is not the only one sick. Hundreds of positions are preparing to disappear at Prime Video and MGM Studios, the legendary Hollywood studio, purchased for $8.45 billion in 2021. In total, Amazon had announced the elimination of 27,000 positions, specifying in March that Twitch was part of the targeted activities. This, even though the group had swelled its ranks during the health crisis to respond to the explosion in demand.
“Today we will begin contacting colleagues affected by these job cuts. Notifications will be sent shortly,” wrote the company’s entertainment chief Mike Hopkins in an email to staff on Wednesday and published by US media . A process which should be completed, on a global scale, by the end of the week. He added: “This is a difficult decision that neither my management team nor I take lightly.”