Amazon-owned streaming platform Twitch is laying off more than 500 people in an effort to “rightsize” the company. said CEO Dan Clancy. Bloomberg first reported the news Tuesday, when many employees learned about the impending layoffs — a day before Wednesday’s official announcement.
Amazon is also laying off “several hundred” people across its Prime Video and Amazon MGM Studios divisions, according to Variety.
“Today I have some incredibly difficult news to share,” Clancy wrote in a letter to staff on Wednesday. “As you all know, we have worked hard over the past year to run our company as sustainably as possible. Unfortunately, we still have work to do to properly grow our business and I’m sad to share that we’ve taken the painful step of reducing our workforce by just over 500 people on Twitch. This will be a very tough day. Our service exists to empower communities to create together, and all of you have played a critical role in nurturing our community and advancing that mission.”
The 500 job cuts come less than a year after Twitch laid off 400 people in March as part of a larger layoff at Amazon. In November, Amazon Games cut nearly 200 jobs and eliminated several games divisions. Clancy said the decision to cut such a substantial number of employees is to “build a more sustainable business.” Despite previous cost-cutting measures — such as ending the “prohibitively expensive” service in South Korea — Clancy said Twitch is “still significantly larger than necessary given the size of our business.” He continued: “So while the Twitch business remains strong, the size of the organization has for some time been based on where we optimistically expect our business to be in three or more years, rather than where we are today. Like many other companies in the technology sector, we are now aligning our organization based on the current size of our business and conservative projections about how we expect to grow in the future.”
Twitch has paid out more than $1 billion to streamers broadcasting on the platform in 2023, something that shows “business remains strong,” Clancy said. The major staff cuts are linked to a worrying trend in the sector that has been accelerating for several years. More than 10,000 people were laid off in 2023, an increase from the estimated 8,500 in 2022. according to an industry layoff tracker. Clancy’s statement echoes that of other industry leaders: its reckless, rapid expansion during the pandemic is now catching up with companies that prioritized short-term growth over long-term sustainability. Devastatingly, it is the workers in the sector who pay the price.
The layoffs at Amazon combined with Unity’s massive job losses of 1,800 have the video game industry already surpassing 2023 in terms of job losses. Like Twitch, game engine maker Unity made several layoffs last year, leading to its largest cuts yet in 2024. In addition to the Twitch layoffs, the company saw several executives depart by the end of 2023, following the departure of former Twitch CEO Emmett Shear in March. Then Twitch president Clancy took over the job and started working on it later a Twitch image rehabilitation tour to win back aggrieved streamers.
Clancy plans to host a broadcast on Twitch Thursday at 4:00 PM EST to discuss the broader impact of the layoffs on the streaming community. “Know that Twitch remains focused on serving our streamers and making it the best place to livestream for years to come,” said Clancy.