It is a safe bet to say that Twitch is one of the most influential apps/websites in recent years. It has made the livelihood of streamers and has given rise to megastars. Those stars continue to dominate the world of media. However, in a recent report by Bloomberg, Twitch has laid off more than 35% of its staff. The reasons are shocking despite Twitch’s success. This piece will look at everything that led to the streaming platform firing more than 500 employees and see why layoffs have been so common in the past year or so.
Contents
- Twitch Fires More Than 500 Employee, Roughly 35% of its Staff in Layoffs
- This Isn’t Twitch’s First Rodeo
- Why Twitch Quit Operating in South Korea
Twitch Fires More Than 500 Employee, Roughly 35% of its Staff in Layoffs
Twitch is laying off 500 employees, a whopping 35% of its staff.https://t.co/xWqmfQqB2I pic.twitter.com/7cPvZpuYYz
— KAMI (@Okami13_) January 9, 2024
As stated by Bloomberg, these layoffs could be reported by Twitch as early as Wednesday, January 10th. In addition, the report also comes after the company’s top-level management i.e., the chief product officer, chief content officer, and the chief customer officer had left the company in the months leading up to this layoff.
Twitch relies heavily on an Amazon-based service for its infrastructure and the company spends a lot to run the service that provides more than a billion hours of streaming every month, Twitch executives told Bloomberg. In addition, Bloomberg also reports that despite being acquired by Amazon 9 years ago, Twitch is still unprofitable.
Twitch CEO Dan Clancy has worked day and night to mend relations with streamers unhappy with the platform. However, despite his best efforts, a lot of popular celebrity streamers have switched over to competing platforms like Kick. On top of it, Twitch’s focus on ad-based revenue as a major income source has led to many ups and downs.
This Isn’t Twitch’s First Rodeo
Despite Twitch firing more than 500 employees in its current layoff, this isn’t their first one. The previous layoffs for Twitch go back as early as last year. Twitch even took two rounds of layoffs as part of an even bigger layoff conducted by Amazon, where they had to fire more than 400 employees.
In terms of gaming, this isn’t even the first layoff in the near year. Unity cut almost 25% of its staff in recent layoffs which constitute almost 1800 employees, claiming it was a ‘company reset.’ At the same time, Danish game developers, Slipgate Ironworks and VR studio Archiact also had to part with a significant portion of their workforce for various financial reasons.
Why Twitch Quit Operating in South Korea
Despite the massive amount of success streamers have had on Twitch, the platform itself has failed to produce profit in the long run. However, it gets even worse when you come to know they have pulled out of countries, mainly South Korea, a huge market for streaming and gaming.
Twitch, the popular video streaming service, will shut down its services in South Korea next year, the company said on Tuesday, Dec 5, after struggling for years with the “prohibitively expensive” costs of operating in the country. https://t.co/OLHKGqHhwf
— Drogon (@drogon_dracarys) January 7, 2024
Twitch will shut down operations in South Korea on February 27th, 2024. In a blog post, CEO Dan Clancy stated that the cost of running operations in the country is “prohibitively expensive.” In addition to that, Afreeca TV, a major streaming platform renowned in South Korea has captured the majority of the market there.
The streaming platform cannot afford to scratch and claw its way to the top because it already has laid off countless employees due to its budgetary issues. Behind the glitz and glamor of the gaming industry, there are layoffs that suggest that even now, it is a frighteningly sensitive industry. Games might not work out and profits convert into losses which might turn into massive layoffs like these.
