Bloomberg reports that Amazon’s streaming unit, Twitch, will lay off 35% of its workforce, amounting to around 500 employees. This comes as the streaming business continues to be unprofitable nine years after Amazon acquired the company. The news follows Twitch CEO’s recent announcement that the company will cease operations in South Korea in February. Twitch also previously laid off 400 employees in March 2023.
This workforce reduction is expected to be officially announced soon amid concerns about Twitch’s significant losses. Several top executives have left the company in recent months, including the product, customer service, and content directors. Twitch also lost its revenue director, who worked in the Amazon advertising unit.
Despite increasing its focus on advertising in recent years and forcing streamers to display ads, the company still struggles to generate profits. Twitch offers around 1.8 billion hours of streaming content per month, and even though the servers belong to Amazon, the infrastructure costs are considerable.
A Twitch spokesperson expressed gratitude for the departing talent’s contributions to the company and wished them well.
Twitch’s current troubles include cutting costs by eliminating exclusive million-dollar contracts and addressing issues related to the platform becoming a “soft porn” portal. In addition, the company has faced credibility challenges, with policies changing frequently in recent months.
On a positive note, Twitch recently announced the adoption of the AV1 codec on its streaming platform. The AV1 encoder allows for a better visual experience, is 30% more efficient, and has a lower bandwidth impact, helping Twitch save resources. Content creators, however, remain concerned about the possible disappearance of Prime subscriptions, a significant financial issue for the platform.