Amazon Is Cutting 35% Of Twitch’s Staff, Over 500 People

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2023 was a horrific year for layoffs in the video game industry, with well over 12,000 jobs lost. But barely two weeks into 2024, we’ve already hit disturbingly high numbers. Days ago, Unity cut 25% of its employees, 1,800 people. Today, AmazonAmazon” data-type=”stock”>
AMZN
is cutting 35% of streaming service Twitch’s staff, after many years of unprofitability.

Twitch CEO Dan Clancy announced the cuts this morning, after yesterday Bloomberg circulated that these cuts were happening based on inside reporting.

“I regret having to share that we are taking the painful step to reduce our headcount by just over 500 people across Twitch,” Clancy said. “This will be a very hard day.”

The Twitch cuts join further Amazon layoffs at Prime Video and MGM Studios today, though those numbers are unknown. Last year, 18,000 people were laid off at Amazon, and this year is beginning with fresh cuts, it appears.

Twitch has been a longstanding bugbear for Amazon, the leader in the livestreaming space but one unable to reach profitability after nearly a decade between its high operating costs and a billion dollars it pays out to its streamers. Rivals like Microsoft’s
MSFT
Mixer have folded, but YouTube streaming remains a consistent competitor, buoyed by Google’s
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larger video site. Lately, Twitch has had to contend with Kick, the gambling-backed streaming service that has poached many of Twitch’s top streamers with contracts in the tens of millions of dollars, with some reportedly over $100 million.

Clancy, in the statement, says that the company is too big where “where we’re at today,” indicating that the current size of the company should be where things are three years from now instead, predicting future growth. This implies more hiring in time, but if Twitch’s ongoing issues are not rectified, who knows how that will play out.

This will have a huge, personal impact in the industry, as it’s hundreds of jobs lost, but many that streamers and content creators have also had direct relationships with employees and liasons for years, and that might destabilize things on many fronts. And then there are the thousand people left behind, now working with 35% less of their friends and coworkers in an environment where morale is sure to be low going forward.

Twitch does not seem to have any sort of magic fix for what ails it. It may continue to grow, as Clancy says, but its costs remain high and it frequently makes decisions that baffle its community, and they have to be reverted and reshaped consistently until they make some amount of sense. Some never do.

So while Twitch may be the market leader, that comes with extreme challenges, and this very well may be the worst moment in its history unfolding here today.

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