Twitch CEO Dan Clancy Announces Layoff As Business Is Not Profitable

(RTTNews) - Amazon (AMZN) owned live streaming site, Twitch's CEO Dan Clancy announced on a blog post that the company is cutting down the workforce by 35%, which accounts for approximately 500 employees, claiming that business isn't "profitable at this point".

Clancy wrote in the post that, "As you all know, 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." He added that in order to sustain the business it is important to not lose money.

The post further stated that Twitch employees in the U.S., Brazil, Canada, Mexico, and Singapore will receive an email from Clancy notifying them that they will no longer be a part of the company.

The chief executive explained that, "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."

Last year, the company had laid off over 400 employees citing that it will help the company to cope with the impact of "current macroeconomic environment".

Clancy stated that the company's parent company, Amazon has been extremely supportive even though Twitch has been struggling to make profit. According to a Fortune report, the company had been unprofitable since the last nine years.

The San Francisco-based company also announced last year that it will exit South Korea's market in February 2024. Clancy explained that the decision was made because even after taking several cost-cutting measures, operating in the country was "prohibitively expensive".

The live-streaming site had recently changed its policy about splitting subscription revenue with streamers. Earlier, it allowed streamers to keep 70% of the revenue but later the company cut the share down to 50% of the revenue.

Clancy clarified that the step was taken because "the cost of retaining those streamers would have been far more than the revenue generated from them."

Twitch, which was founded in 2011, was bought by Amazon in 2014 for $970 million.