Amazon-owned streaming giant Twitch to slash 35% of workforce amid profitability struggle

Twitch, the streaming platform under Amazon's umbrella, is bracing for a significant downsizing, aiming to reduce its staff by 35%, roughly accounting for 500 employees.

According to a Bloomberg News report, sources speculate that the imminent announcement could be made public as early as Wednesday, underscoring the urgency of the restructuring within the platform.

Despite Amazon's acquisition of the company nine years ago, Twitch continues to grapple with financial challenges, remaining in the red.

This move aligns with Twitch CEO Dan Clancy's previous statement made in December, hinting at the closure of operations in South Korea, scheduled for February this year. High operational costs and escalating network fees were cited as the primary reasons behind this strategic decision.

This downsizing initiative comes on the heels of a previous round of layoffs in March last year when Twitch shed over 400 positions. The action was prompted by the platform's failure to meet projected user engagement and revenue growth.

Twitch is a live streaming platform primarily used for broadcasting and watching video game streams. However, it's evolved beyond gaming to include various categories like creative arts, music, chatting, and more. Users can stream their content in real-time, interacting with viewers through live chat. It's become a hub for communities to engage, share interests, and watch live content from creators worldwide.

Twitch's success has led to the emergence of internet personalities and celebrities, making it a significant platform for entertainment and community building.

The meteoric rise of Twitch caught the attention of tech giant Amazon, resulting in its acquisition for $970 million in 2014. Amazon's involvement sparked strategic integrations, notably with their subscription service, Amazon Prime. This collaboration birthed new synergies, transforming the platform's capabilities and user experience.

Twitch's expansion continued in 2016 with the acquisition of Curse LLC, a hub for online video gaming communities. This move broadened Twitch's reach and introduced novel avenues for engagement. Notably, the platform unveiled features allowing users to purchase games directly through stream links. Moreover, a pioneering program empowered streamers to earn commissions from game sales linked to their broadcasts.

By 2015, Twitch's viewership had burgeoned to exceed 100 million monthly viewers, cementing its position as a dominant force in live-streaming video services. In 2017, it solidified its foothold in the US gaming scene, maintaining its lead over competitors like YouTube Gaming, which disbanded its standalone app in May 2019.

The platform's growth trajectory was staggering, as evidenced by its statistics in February 2020: a monthly count of three million broadcasters and an impressive 15 million daily active users, with an average concurrent user count of 1.4 million. Twitch's community had expanded significantly, boasting over 27,000 partner channels by May 2018.

As of October 2023, Twitch had firmly entrenched itself as the 37th most-visited website globally, drawing 20.26% of its traffic from the United States. Germany and South Korea followed suit, contributing 7.08% and 5.49% of its traffic, respectively.

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