Twitch, the video game streaming platform bought by Amazon 10 years ago for nearly US$1bil (RM4.64bil), is reducing its workforce by over 500 employees as it aims to make the expensive division profitable. Twitch CEO Dan Clancy explained in an email to employees that despite cost cuts and increased efficiency, the platform “is still significantly larger than it needs to be given the size of our business”.
Clancy also admitted that the organization has been sized based on optimistic future expectations rather than its current status. Amazon acquired Twitch Interactive in 2014 for US$970mil (RM4.50bil) as it sought to tap into the rising popularity of video gaming as an online spectator sport.
Twitch is a multi-channel online network designed for a generation raised with video games, allowing them to watch the world’s best gamers much like people watch professional sports. Last month, Twitch, based in San Francisco, announced it was pulling out of the South Korean market due to high network fees. Clancy stated that the network fees paid to South Korean internet operators were 10 times higher than in most other markets, although specific numbers were not provided to support this claim.
Clancy wrote, “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.”
Amazon has been cutting thousands of jobs after a hiring surge during the pandemic. In March, Amazon announced plans to lay off 9,000 employees, in addition to the 18,000 employees it stated it would lay off in January 2023. Job cuts are also happening in other areas of the company this week.
Amazon is also cutting several hundred positions across its Prime Video and MGM Studios unit. Mike Hopkins, senior vice president of Prime Video and Amazon MGM Studios, informed employees that the company is increasing investment in high-impact areas while pulling back from others. – AP
