(Bloomberg) -- Amazon.com Inc.’s livestreaming site Twitch is poised to cut 35% of its staff, or about 500 workers, according to people familiar with the plans, the latest in a series of job reductions there.
The cuts, which could be announced as soon as Wednesday, come amid concerns over losses at Twitch and after several top executives left the company in the span of a few months. A Twitch spokesperson declined to comment.
Running a large-scale website supporting 1.8 billion hours of live video content a month is enormously expensive, despite Twitch’s reliance on Amazon’s infrastructure, company executives have said. In December, Twitch Chief Executive Officer Dan Clancy said the company would cease operations in South Korea, where the costs are “prohibitively expensive,” according to a blog post he wrote.
Twitch has increased its focus on advertising in recent years. Nine years after Amazon’s acquisition of the company, the business remains unprofitable, according to the people, who asked not to be identified discussing private information.
In the final months of 2023, several top executives announced their departures, including Twitch’s chief product officer, chief customer officer and chief content officer. Twitch also lost its chief revenue officer, who worked on Twitch from within Amazon’s Ads unit.
“It’s always bittersweet when talented leaders move on to pursue new opportunities,’’ a Twitch spokesperson said at the time. “We are incredibly grateful for their contributions to Twitch and our community, and wish them all the best.”
The former employees all declined to comment.
Since he took the position in March 2023, Clancy has been on a cross-country charm offensive to mend relations with the gaming celebrities who make a living streaming on Twitch. Many of them chafed at Twitch’s original approach to ads, which the company reworked after criticism. Streamers have praised Clancy’s desire to listen to their concerns after years of complaints that the service was out of touch with its users.
The new chief has struggled to stem losses, however. Twitch undertook two rounds of layoffs last year, cutting over 400 positions, part of wider job reductions at Amazon.
The online retail giant initiated its biggest-ever corporate job cuts in 2022, which it expanded to 27,000 positions across the company. It continued in October with a new round of cuts to its music division, which encompasses the company’s audio streaming platform and digital storefront for songs.
I think its worth remembering that Twitch started out as "Justin.tv", a popular site for pirate streams of athletic events. The popularity of video game streams was almost an afterthought until the company pivoted to legal monetization. Then, as streamed gaming and TTRPG let's play videos took off, they got the kind of cash injection that made them attractive for acquisition. But the legit cash stream also forced them out of the pirated athletics space.
In that way, it sort of followed Napster's model - initially illegal/quasi-legal consumer consolidation that pivoted to legal service built on name recognition - abet far more successfully.
Downsizing the staff to nothing and just squeezing the firm out based on name recognition seems to be all anyone at Amazon HQ knows to do with the firm. They're just profiting from inertia at this point, as people with recognized brands struggle to jump ship without losing their base of viewers.
I have to wonder how soon it'll be before Amazon buys up Patreon and repeats this trick.
Crunchyroll is a slightly better example. They were a straight up pirate anime site until they pivoted to being a legal service successfully and these days they're the most anti-piracy bunch of shits in the sector.