Livestreaming giant Twitch is slashing its workforce yet again, cutting 35% of staff in its second major round of layoffs over the past year. The Amazon-owned company will lay off roughly 500 employees, according to a Bloomberg report, in an announcement expected as early as this week.
The news comes on the heels of leadership changes, swelling operating expenses, and growing resentment from the Twitch community over increased monetization efforts. Just months after longtime CEO Emmett Shear handed over control to new chief Dan Clancy, Twitch laid off nearly 400 employees across various divisions. Amazon stepped in later in 2022 to shutter Twitch’s first-party Crown channel and gaming-focused Game Growth team, amounting to an additional 180 lost jobs.
In a likely related move, Twitch recently publicized plans to cease operations in South Korea, citing unsustainably high network usage fees in one of the world’s premier esports markets. Clancy stated bluntly that the company had been losing money in the region, saying there was “no path forward” to profitability in Korea.
Despite exponential growth in users and viewership during the pandemic, Twitch has notoriously struggled to operate in the black. Its controversial prioritization of advertising revenues has apparently failed to bear fruit; according to Bloomberg, Twitch remains unprofitable close to a full decade post-acquisition by Amazon. The platform saw several executives, including its Chief Revenue Officer, exit the company in December 2022.
The costs associated with supporting smooth, global livestreaming at scale are substantial, per Clancy. He wrote in a 2022 blog post that top broadcasters often rack up $1,000 or more in monthly Amazon Web Services fees alone to deliver high-quality streams worldwide. “Delivering high definition, low latency, always available live video to nearly every corner of the world is expensive,” he conceded.
With two rounds of heavy cuts over the past year, it is clear Twitch still faces economic headwinds as it attempts to chart a path toward profitability under new leadership. The latest layoffs underscore the platform’s ongoing struggles, even as viewership booms.
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