The decision to lay off Twitch employees comes amid a new round of reducing the workforce at Amazon. Yesterday, the tech giant announced the cut of as many as 9,000 jobs across various departments.
Twitch, a live streaming platform for gamers and a subsidiary of Amazon.com Inc (NASDAQ: AMZN), has announced plans to reduce its workforce as a result of its slowing growth and decreasing revenue caused by the current macroeconomic environment. According to the company’s blog post, Twitch will lay off 400 employees.
Twitch CEO Dan Clancy stated:
“We take this responsibility incredibly seriously and sometimes need to make extremely hard decisions to ensure we protect our business in order for Twitch to be around for a long time.”
“Like many companies, our business has been impacted by the current macroeconomic environment, and user and revenue growth has not kept pace with our expectations. In order to run our business sustainably, we’ve made the very difficult decision to shrink the size of our workforce,” added he.
The announcement by Twitch follows the news about its previous CEO Emmett Shear stepping down from his role after 16 years of running the company he co-founded back in 2005. Shear saw the platform growing and becoming the cultural center of the video game world. Now, he has an advisory role in the company. Meanwhile, Dan Clancy, the newly announced CEO, has been the president of the company. The decision to lay off employees has been the first serious move since he took over Twitch leadership.
Twitch has been facing a lot of challenges lately, the biggest one has been its policy on revenue sharing with streamers. For years, Twitch had been signing special agreements with top streamers to give them a more favorable 70/30 split of subscription revenue. However, in September 2022, the company announced that starting from June 1, 2023, streamers with pre-existing agreements would only receive the 70/30 split for their first $100,000 earned through subscription revenue, with revenue above that being split at the standard 50/50 share split. The new policy did not receive much support from users, and some of them started looking for other streaming platforms.
Another Round of Layoffs at Amazon
As mentioned earlier, Twitch is a subsidiary of Amazon that acquired the platform back in 2014 for $970 million. And the decision to lay off Twitch employees comes amid a new round of reducing the workforce at Amazon. Yesterday, the tech giant announced the cut of as many as 9,000 jobs across Amazon Web Services, PXT (People eXperience and Technology), advertising, and Twitch.
Amazon CEO Andy Jessy stated:
“Given the uncertain economy in which we reside and the uncertainty that exists in the near future, we have chosen to be more streamlined in our costs and headcount.”
The previous headcount cut at Amazon took place in January when the decision to downsize the team affected 18,000 employees.
Following yesterday’s announcement, Amazon stock fell by 1.25% yesterday to close at $97.71 per share. Year-to-date, Amazon stock is 16.32% up.
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