Yesterday, Bloomberg reported that Twitch was set to lay off 500 employees, following a similar round of 400 less than a year ago. Now Twitch has gone through with it. Employees aren't sure what comes next.
Following the report, Twitch employees received a brief, detail-free acknowledgement in company Slack late yesterday afternoon that mostly served to heighten anxiety.
“I want to acknowledge that the Exec team has seen the Bloomberg article and we know this is causing anxiety,” wrote chief people officer Lauren Nunes in a Slack message viewed by Aftermath. “Seeing this type of speculation about Twitch and our people in the news is of course unsettling. As Dan has shared in the past, we don't comment on these types of rumors or speculation and don't have anything to share right now."
"That means this layoff is happening," replied one employee at the time. "Because if it wasn't, you'd have said so."
“Thanks for nothing, Lauren!” replied another.
In the email Clancy sent to employees today, which he also published to Twitch’s official blog, he called the layoffs “difficult and painful” and explained that despite prior layoffs and cost cuts, “it has become clear that our organization is still meaningfully larger than it needs to be given the size of our business.” He added that last year, Twitch paid out over $1 billion to streamers. “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,” Clancy wrote. “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.”
Current and former Twitch employees – who were granted anonymity on the basis that they are not authorized to speak publicly and, in the case of laid-off employees, are still in conversation with the company about their severance – aren’t sure how Twitch is going to withstand yet another round of cuts. Many teams, like the one responsible for esports/competitive branch Twitch Rivals and various community engineering teams, have been halved. Development and marketing teams have also been hit hard. Current and former employees say it’s hard to find a team that hasn’t been impacted in a significant way.
“We were already operating with a significant amount of workload prior to the previous layoffs,” one now-former Twitch employee who worked with the Rivals team told Aftermath. “Losing nearly half the team then was unbelievable, and we struggled to make it through the rest of the year, even with reducing the number of events we ran. I have no idea how folks are going to make it work now. So many plans for 2024 have been in motion since the middle of last year. I'm not sure what happens to them now.”
Employees believe this will lead to a noticeable slowdown in new features in the near future – an area in which Twitch had finally picked up some wins last year after languishing in years prior.
“The customer effect will be slower and less feature releases and worse support,” said one current Twitch employee. “For the most part there's less support for things that will grow Twitch. Everything will have to be heavily prioritized.”
“They will need to refocus on doing what they do better and less on putting out new features,” said another employee who was laid off today.
A Twitch spokesperson declined to comment on what current and former employees told Aftermath.
Today’s Twitch layoffs coincide with cutbacks at Prime Video and Amazon MGM Studios that will impact “several hundred” workers, according to Deadline. They follow late-2023 cuts to Amazon Games of 180 employees, as well as Twitch’s announcement that it will be ceasing operations in Korea due to prohibitively high costs. Amazon eliminated over 27,000 jobs in 2023.
Twitch CEO Dan Clancy, who took the helm after Emmett Shear – CEO of 16 years – stepped down last year, is naturally a subject of scrutiny following his second round of layoffs in less than a year. Clancy has made himself popular with the Twitch community by streaming regularly, cameoing on the broadcasts of numerous creators, and communicating much more readily and directly than Shear. However, he is still subject to Amazon’s demands for profitability, a goalpost of which Twitch has repeatedly fallen short since it was acquired by Amazon in 2014. Current and former employees are split on Clancy.
“I was wary of Dan and his motives, and I am unsure he’s the best fit to lead,” said one Twitch employee who lost their job today. “The fact that the company isn’t trying to expand beyond gaming content and really putting in ways to help with monetization from an ads perspective is going to hurt the company. There were also plenty of mess-ups in the past that have led Twitch to this point, and leadership as a whole has not been able to plan for the future in a good way.”
“I have full confidence that Twitch will be able to succeed even after this loss,” said another employee who got laid off. “I think Dan is a really great CEO and understands what direction Twitch needs to take to be around for years to come.”
Despite rampant speculation – and memes from rival streaming service Kick – that Amazon is gearing up to sell Twitch, few think that’s likely to happen. Twitch still provides value to Amazon in less direct ways than profit, for example through Amazon’s Interactive Video Service (IVS), which is based on Twitch tech. But even if that side of the business migrates away from Twitch, current and former employees still believe Amazon will try to maintain its stronghold in the livestreaming frontiers.
“I know that Twitch has been operating at a loss for years and that Amazon is extremely rigid when it comes to budgets, but I think the value of Twitch as a platform and the amount of traffic it generates is too appealing for Amazon to walk away,” said a now-former Twitch employee. “I do think that all of the value-added programs – like Twitch Rivals – will continue to be diminished while the focus remains on keeping the platform running, though.”
“It’s more likely that Twitch will become break-even or slightly profitable, and Amazon will keep it around to ingest ad data from users,” said a current employee.
As for those who remain at Twitch, they’ll do their best to keep the service afloat.
“We'll always get through it,” said a current employee.
