After Hundreds of Layoffs, World's Largest Streaming Site Admits the Truth
Things are not well at popular streaming site Twitch, despite the platform getting the sort of web traffic that most sites would do unspeakable things for.
In a “difficult update” posted by Twitch CEO Dan Clancy on Wednesday, the company boss outlined some of the issues afflicting the most popular streaming site in the world.
“I wanted to send a short note to let you know that we’ve made the difficult decision to reduce the size of our workforce today,” Clancy noted in the blog post.
In an update to the post, Clancy offered some of the numbers.
“As you all know, we have worked hard over the last year to run our business as sustainably as possible,” Clancy wrote. “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.”
Clancy continued: “Over the last year, we’ve been working to build a more sustainable business so that Twitch will be here for the long run and throughout the year we have cut costs and made many decisions to be more efficient.
“Unfortunately, despite these efforts, it has become clear that our organization is still meaningfully larger than it needs to be given the size of our business. Last year we paid out over $1 billion to streamers. 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.”
Clancy offered more details in a livestream, according to IGN.
“I’ll be blunt: we aren’t profitable at this point,” Clancy said. “Amazon has been extremely supportive of Twitch. Big thing for being sustainable over time is ensuring we don’t lose money. That’s a big part of my job because that’s going to be what makes sure we can be here for the long term.”
Given that, however, Clancy is not worried about Amazon growing tired of the streaming site and shuttering it.
“The answer is emphatically no,” Clancy said in response to a chatter asking if he was worried about Amazon’s response.
Clancy added: “Not at all. Amazon is very bullish on Twitch. They’ve been investing heavily in Twitch.”
The biggest issue appears to be that aforementioned $1 billion paid to streamers, because foot traffic is not an issue for the ubiquitous streaming site.
That issue has only been exacerbated with streaming competitor Kick throwing around lavish contracts for top streamers.
According to Twitch, the site typically features 35 million daily visitors with over a trillion minutes of streaming watched in 2022.
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