Amazon‘s gamer-centric streaming outlet Twitch is laying off 500 staffers, CEO Dan Clancy told employees in a memo this morning.
The move is being made in sync with cutbacks at corporate siblings Prime Video and Amazon Studios. Bloomberg had reported the layoffs at Twitch on Tuesday. Clancy said the news had “leaked,” suggesting that the Amazon division had to hold off on confirming any details or answering employee questions in order to co-ordinate today’s announcement with that of the other divisions.
Clancy acknowledged in a blog post that the cuts are “painful” and that they come after the company had already been on a cost-cutting drive. Despite that effort to be more efficient, he wrote, “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 3 or more years, not where we’re at today. 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.”
For advertisers, Twitch has been positioned as one of the pillars of Amazon’s entertainment and media portfolio, alongside Prime Video, Amazon Music, Fire TV and Freevee. While it has been in the Amazon fold for nearly a decade, Twitch has been in a transitional period in recent months, following the departure last March of founder and former CEO Emmett Shear.
Clancy did not name any media outlets, but he addressed the Tuesday reports and resulting angst in his blog post. “I also want to acknowledge how disappointed I was yesterday that this information leaked,” he wrote. “I am sorry for all of the anxiety that it caused over the last several hours. Our hope was that you all would hear from us this morning and very quickly understand how this impacted your role and we were unfortunately not able to accelerate the timeline, which I know is very frustrating.”
