Twitch — the live-streaming platform run by Amazon.com Inc. — said on Wednesday that would cut a little over 500 jobs, or 35% of its workforce, following concerns about overexpansion and the company’s ability to turn a profit.
Amazon
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on Wednesday also said it would cut “several hundred” positions in its Prime Video and MGM Studios segments. The moves are the latest round of layoffs in the tech space, amid broader expectations for more aggressive efforts to control expenses this year and protect profit margins.
“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,” Twitch Chief Executive Dan Clancy said in a blog post on Wednesday.
“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,” he continued.
He said that last year, Twitch paid more than $1 billion to streamers. He added that “for some time now the organization has been sized based upon where we optimistically expect our business to be in 3 or more years, not where we’re at today.”
“As with many other companies in the tech space, we are now sizing our organization based upon the current scale of our business and conservative predictions of how we expect to grow in the future.”
According to the website Layoffs.fyi, scores of workers were laid off across the tech industry, with 1,186 companies globally making 262,682 job cuts. The layoffs followed the pandemic-era digital boom and bust, and concerns about higher interest rates and broader consumer sentiment as prices for essential goods rose over the past two years.
The news of Twitch’s job cuts was first reported on Tuesday by Bloomberg, which noted that the cuts followed other rounds of layoffs at the company, and a handful of senior executives departed last year. Representatives for Amazon and Twitch did not respond to requests for comment on Tuesday.
“This move reflects Twitch’s struggle with profitability and high operational costs, mirroring a trend of workforce reductions across the tech industry, including companies like Google and Meta,” Benchmark analyst Mike Hickey said in a note on Wednesday.
The employee dismissals at Twitch would follow staff cuts at Amazon’s gaming division and thousands of layoffs at the online retailer last year. On Wednesday, Mike Hopkins, SVP of Prime Video and Amazon MGM Studios, said the segments would redouble their efforts on those with the “most impact.”
“Throughout the past year, we’ve looked at nearly every aspect of our business with an eye towards improving our ability to deliver even more breakthrough movies, TV shows, and live sports in a personalized, easy to use entertainment experience for our global customers,” he said.
“As a result, we’ve identified opportunities to reduce or discontinue investments in certain areas while increasing our investment and focus on content and product initiatives that deliver the most impact,” he continued.
Companies like Xerox Holdings Corp.
XRX,
and Unity Software
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have also recently announced big job cuts.
James Rogers contributed to this story.
