Turns out, the world’s leading live streaming platform Twitch is not profitable, according to its chief executive officer Dan Clancy.
Home to the most popular video game streamers in the world and a channel to the biggest Esports events, Twitch had to cut over 500 employees, or about 35 percent of its workforce, as it had been “oversized” throughout the years.
“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,” Clancy said in an email to Twitch employees.
“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 three or more years, not where we’re at today.”
This is not the first time that Twitch had to lay off employees as the company did two rounds of layoffs.
In a livestream, Clancy admitted that the company was not making money and was merely getting by with the help of its parent company Amazon.
“We have implied this before where we say we need to run it sustainably. I will be blunt, we are not profitable at this point,” Clancy said.
