Twitch, the video game streaming platform acquired by Amazon almost ten years ago for approximately USD 1 billion, is laying off more than 500 employees as the company tries to turn the tremendously expensive division profitable.
In an internal email, Twitch CEO Dan Clancy acknowledged that, despite implementing cost-cutting measures and enhancing efficiency, the platform's size remains considerably larger than necessary for its current business scale. He explained that the organisation had been sized based on optimistic growth projections for the next three years rather than its present status.
“For some time now, the organisation has been sized based on where we optimistically expect our business to be in 3 or more years, not where we're at today,” Clancy wrote.
Amazon acquired Twitch Interactive in 2014 for USD 970 million as it looked for a way to take part in video gaming's growth as an online spectator sport. Twitch, a multi-channel online network tailored for a generation raised on video games, provides viewers with the opportunity to watch top gamers, akin to the way people follow professional sports.
Last month, Twitch, headquartered in San Francisco, revealed its decision to exit the South Korean market due to the high costs associated with network fees. Clancy had previously highlighted that the fees paid to South Korean internet operators were ten times more than those in most other markets, though specific numbers were not provided.
“As you all know, we have worked hard over the last year to run our business as sustainably as possible," Clancy wrote.
“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," she said.
(With AP inputs)
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