Amazon-owned streaming platform Twitch is laying off more than 500 people in a move designed to “rightsize” the company, according to CEO Dan Clancy. Bloomberg first reported the news Tuesday, which is when many employees learned about the impending layoffs — a day before Wednesday’s official announcement.
Amazon is also laying off “several hundred” people in 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 sent to staff on Wednesday. “As you all know, we have worked hard over the last year to run our business as sustainably as possible. Unfortunately, we still have work to do to rightsize our company and I regret having to share that we are taking the painful step to reduce our headcount by just over 500 people across Twitch. This will be a very hard day. Our service exists to empower communities to create, together, and every single one of you has played a vital role in fostering our community and furthering that mission.”
The 500 job cuts come less than a year after Twitch laid off 400 people as part of a larger Amazon layoff in March. In November, Amazon Games cut almost 200 jobs and eliminated several of its games divisions. Clancy said the decision to axe such a substantial number of employees is to “build a more sustainable business.” Despite earlier cost cutting measures — like ending “prohibitively expensive” service in South Korea — Clancy said Twitch is “still meaningfully larger than it needs to be given the size of our business.” He continued: “So while the Twitch business remains strong, 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.”
Twitch has paid out more than $1 billion in 2023 to streamers that broadcast on the platform, something that shows that “business remains strong,” according to Clancy. The major staffing cuts are linked to a worrying industry trend that’s been accelerating for a couple years now. More than 10,000 people were laid off in 2023, an increase from an estimated 8,500 in 2022, according to an industry layoff tracker. Clancy’s statement echoes those of other industry leaders — reckless, rapid expansion during the pandemic is now catching up to companies that prioritized short-term growth over long-term sustainability. Devastatingly, it’s the industry’s workers that pay the price.
Amazon’s layoffs combined with Unity’s massive 1,800 job cuts means the video game industry is already outpacing 2023 in the number of lost jobs. Like Twitch, game engine maker Unity made several rounds of layoffs last year, leading into its largest cuts yet in 2024. Alongside Twitch’s layoffs, the company’s seen several executives exit toward the end of 2023, following former Twitch CEO Emmett Shear’s departure in March. That’s when Twitch president Clancy took over the job and later embarked on a Twitch image rehabilitation tour to win back aggrieved streamers.
Clancy intends to host a broadcast on Twitch on Thursday at 4 p.m. EST to speak to the layoffs’ wider impact on the streaming community. “Please know that Twitch remains focused on serving our streamers and ensuring that this is the best place to livestream for many years to come,” Clancy said.