Amazon’s Twitch cuts more than 500 jobs attempting to turn expensive platform profitable
Twitch, the video game streaming platform that was acquired by Amazon for nearly $1 billion a decade ago, is laying off more than 500 employees as the company tries to make the hugely expensive division profitable.
Twitch CEO Dan Clancy said in an email to employees that even with cost savings and increasing efficiencies, the platform is “still significantly larger than necessary given the size of our company.”
“For some time now, the size of the organization has been based on where we optimistically expect our company to be in three or more years, rather than where we are today,” Clancy wrote.
Amazon bought Twitch Interactive for $970 million in 2014 as it looked for a way to participate in the growth of video games as an online spectator sport.
Twitch is a multi-channel online network built for a generation of people who grew up with video games and enjoy watching some of the best gamers in the world, just as many people watch professional sports.
Last month, San Francisco-based Twitch said it was pulling out of the South Korean market due to expensive network fees. Clancy said at the time that the network fees the company paid to South Korean internet operators were 10 times higher than in most other markets. He did not provide specific figures to support such claims.
“As you all know, we have worked hard over the past year to run our business as sustainably as possible,” Clancy wrote. the painful step of reducing our workforce by just over 500 people on Twitch.”
Amazon has cut thousands of jobs after a surge in its workforce during the pandemic. In March, Amazon announced it planned to lay off 9,000 employees. That was in addition to the 18,000 employees the tech giant said it would lay off in January 2023.
Job cuts are taking place elsewhere in the company this week.
Amazon is cutting hundreds of positions in its Prime Video and MGM Studios divisions. Mike Hopkins, senior vice president of Prime Video and Amazon MGM Studios, said in a letter to employees that the company is boosting investment in areas with the most impact while pulling away from others.