Is Amazon's Twitch in Trouble? Job Cuts on the Line as Streaming Giant Grapples with Losses

Amazon.com Inc's AMZN Twitch, a prominent livestreaming platform, reportedly plans to reduce its workforce by 35%, equating to about 500 employees. 

This decision, expected to be announced soon, follows a series of top executive departures and ongoing financial losses at Twitch, Bloomberg reports.

Despite its integration with Amazon's infrastructure, operating Twitch, which supports 1.8 billion hours of live video content monthly, remains a substantial financial burden. 

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Twitch's CEO Dan Clancy, who took over in March 2023, cited high operational costs as a reason for shutting down operations in South Korea, Bloomberg reports.

Twitch, which has been focusing more on advertising, is yet to turn a profit, even nine years after being acquired by Amazon. 

The past few months of 2023 saw a significant exodus of executives, including the chief product, customer, content, and revenue officers. 

The departures and Clancy's efforts to improve relations with streamers dissatisfied with Twitch's initial ad strategies highlight the platform's challenges.

Under Clancy's leadership, Twitch has reevaluated its advertising approach, responding to streamers' criticisms. 

However, the platform continues to struggle financially, leading to two layoffs the previous year and cutting over 400 jobs. 

These Twitch-specific reductions are part of Amazon's broader corporate downsizing, which marked the company's most significant job cuts in 2022, totaling 27,000 positions, as per Bloomberg. 

The cuts extended into Amazon's music division, affecting its audio streaming services and digital song storefront.

Interestingly, Elon Musk's X (formerly Twitter) expansion into live video game streaming positioned it as a competitor to Amazon's Twitch and Alphabet Inc's GOOG GOOGL YouTube. 

This move aligns with his vision to transform X into an "everything app," encompassing various functionalities like payments, audio and video calling, and shopping.

Since 2014, Twitch has maintained a stronghold in the video game live-streaming sector, accounting for about 75% of the industry's total viewing time in 2022, as of April 2023.

Insider Intelligence predicts Twitch will experience sustained growth in the coming two years, with video content consumers in the U.S. projected to make up 13.7% of its monthly viewership.

Price Action: AMZN shares are trading higher by 0.35% at $151.90 premarket on the last check Wednesday.

Also Read: Twitch Revises Sexual Content Policies: Here's What's Changing

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.