Twitch, Amazon’s live-streaming site, announced on Wednesday that it is laying off 35% of its staff, or more than 500 employees, due to its lack of profitability. This is the second major cutback in less than a year, as the company faces stiff competition and low revenue from its creators.
CEO Dan Clancy, who took over in March 2023, said in a blog post, “I regret having to share that we are taking the painful step to reduce our headcount by just over 500 people across Twitch.” He added that the “organization is still meaningfully larger than it needs to be given the size of our business.”
Clancy had previously eliminated 400 positions and defended the layoffs as “the right moves to help run this business long-term for creators.” He also decided to shut down Twitch in Korea last month, citing high costs. Since he became the CEO, Twitch has lost more than 900 employees, halving its workforce, according to PC Gamer.
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Twitch claims to have over 35 million daily visitors, but its number of active streamers has dropped from 10 million in January 2021 to less than 8 million in 2023, according to Twitch Tracker. The platform has failed to attract and retain creators, who are the main source of its income.
Twitch is not even paying the minimum wages
The Washington Post reported that many popular streamers earn less than minimum wage on Twitch. The platform tried to lure more creators by offering a 70% revenue share in June 2023, but it only applied to 2.5% of streamers and dropped to 50% after $100k.
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The Amazon-owned platform also struggles to monetize its content with ads, unlike its rivals like YouTube. Clancy even said he wanted to reduce ads on the platform, which pleased viewers but not streamers.
Twitch has also faced challenges in moderating its content, especially regarding nudity. The platform banned suggested nudity a few weeks ago, but its policies have been inconsistent and unclear. Twitch seems to have a hard time defining its audience and its vision after more than a decade of existence.
