Twitch, the video game streaming platform that Amazon bought a decade ago for nearly $1 billion, is laying off more than 500 employees as the company tries to make its hugely expensive division profitable.
Even with cost cuts and increased efficiency, the platform is “still meaningfully larger than needed given the size of our business,” Twitch CEO Dan Clancy said in an email to employees.
“For some time, the size of the organization has been determined not by where we are today but by where we optimistically expect our business to be in 3 or more years,” Clancy wrote.
Amazon acquired Twitch Interactive for $970 million in 2014 as it looked for a way to take part in the growth of video games as an online spectator sport.
Twitch is a multi-channel online network created for a generation that grew up on video games and, while many people watch professional sports, love watching some of the best players in the world.
Last month, San Francisco-based Twitch announced that it was withdrawing from the South Korean market due to expensive network fees. Clancy said at the time that the network fees the company paid to South Korean internet operators were 10 times higher than in most other markets. He did not give specific figures to support such claims.
“As you all know, we have worked hard over the past year to operate our business as sustainably as possible,” Clancy wrote. “Unfortunately, we still have work to do to right-size our company, and I’m sorry to have to share that we’ve taken the painful step of reducing our headcount at Twitch by just over 500 people.”