Amazon has announced another round of layoffs are coming with Twitch being hit hard.
In a memo sent out by Amazon CEO Andy Jassy on Monday morning, Amazon would be letting go 9,000 employees, with cloud computing, human resources, advertising, and Twitch, in particular, being affected. In his first week as the CEO of Twitch after co-founder Emmett Shear resigned, Dan Clancy released a letter to the Twitch community declaring more than 400 Twitch employees would be let go as part of this round of layoffs.
CEO Transition: Emmett Shear Steps Down
Emmett Shear, co-founder and long-time CEO of Twitch, recently stepped down from his position, with President Dan Clancy stepping in as the new CEO. While Shear cited his reasons for departing were to focus on family, it’s possible that this change in leadership could be related to the recent layoffs and broader organizational changes at Twitch.
User and Revenue Growth Falling Short
In his blog post, CEO Dan Clancy stated that Twitch “has been impacted by the current macroeconomic environment” as many businesses have. Perhaps the most alarming part of the statement to the Twitch community was the mention that “user and revenue growth has not kept pace with our expectations.”
Twitch viewership has stagnated in recent months after seeing massive growth during the COVID-19 pandemic. Viewers are returning to work and school and are watching Twitch less than this time last year.
In terms of revenue, last September Twitch reinforced its decision to maintain a 50-50 subscriber revenue split between the company and its streamers and even announced they were going to cap earnings for those on a higher subscriber split. That, coupled with their aggressive strategy to incentive streamers to run ads through an Ad Incentive Program, makes it clear Twitch is trying everything it can to bring in more revenue to meet Amazon’s demands.
The Impact on Streamers
Despite Clancy’s assurances, the Twitch layoffs and leadership transition could still have several implications for the platform. While it’s difficult to predict the exact effects of these layoffs and leadership changes on streamers, streamers should continue to keep a close eye and prepare for potential shifts in the platform’s direction and support.
Twitch is projected to have 1,000 – 5,000 employees so a round of layoffs of this size will undoubtedly create some impact. We will wait to see which departments experience these layoffs and assess some possibilities on how it could affect streamers.