Twitch Layoffs Feared As Amazon Loses More Money: Report

Posted: July 31, 2024

Twitch employees are growing increasingly anxious about the possibility of further layoffs as the Amazon-owned streaming platform grapples with ongoing financial challenges. Despite previous layoffs and efforts to boost revenue, including a hike in subscription prices, new reports suggest that Twitch’s financial woes persist, fueling concerns among staff and industry insiders.

According to The Wall Street Journal, Twitch’s revenue has been negatively impacted by a decline in spending from its top contributors and a slowdown in new user registrations. These issues have led to speculation that user engagement on the platform has significantly dropped. Even though Twitch generates an impressive $2 billion annually, the company continues to struggle financially. This situation is particularly concerning given that Twitch was acquired by Amazon for nearly $1 billion in 2014, a decade ago. Now, with the platform’s ongoing financial difficulties, employees are worried that Twitch may announce another round of layoffs following its annual operation review in the fall. This fear comes on the heels of significant layoffs in January 2024, when the company let go of 500 workers, approximately 35% of its total workforce.

These concerns are further amplified by the broader context of Amazon’s layoffs, which have affected multiple divisions within the company. Twitch employees fear that the platform could follow the path of other underperforming Amazon-owned entities, such as Goodreads and Woot, both of which have been labeled as “zombie brands”—businesses that continue to operate but fail to innovate or grow. There is a growing sense among Twitch insiders that the platform could stagnate and lose its competitive edge in the rapidly evolving streaming market.

Adding to the controversy, Twitch CEO Dan Clancy has faced criticism for his frequent global travels, during which he meets with streamers while the company struggles financially. Clancy has defended these trips, comparing his meetings with streamers to a manufacturing company executive meeting with suppliers and customers. However, many Twitch employees view these trips as poorly timed and out of touch with the company’s current financial reality.

Amid these challenges, morale at Twitch is reportedly low, with many employees feeling uncertain about their future at the company. The fear of additional layoffs is compounded by a belief that Twitch’s current strategies are not adequately addressing the root causes of its financial troubles. The company’s reliance on big spenders, combined with declining user engagement, suggests that more substantial changes may be necessary to restore confidence among its workforce and user base.

As Twitch navigates these turbulent times, the uncertainty surrounding its financial stability and future within Amazon continues to weigh heavily on its employees. The platform, once a thriving hub for live streaming, now faces significant challenges that threaten its position in the competitive digital landscape. The coming months will be critical for Twitch as it reassesses its strategies and works to address the concerns of its employees and users alike.