Twitch is the biggest destination for game streaming, with few sites achieving anything close to its cultural weight. The live streaming side of video games has always been something of a loss leader for Amazon though. That’s something we’ve been reminded of this week as we’ve seen sweeping layoffs made. Twitch layoffs have been announced that total a full 35% of its total workforce. The live streaming platform from Amazon is being cut back significantly.

Twitch has managed to achieve a prominence in video game streaming that’s unparalleled. Although, that’s come without a clear path to making the platform profitable. Amazon has close to a monopoly in the industry, although there are growing numbers choosing Google in the Twitch v YouTube argument. This latest wave of layouts scales back the staff at Twitch significantly. What do the latest cuts mean?

Credit: Twitch

Twitch Layoffs Hit 25% of Work Force

Twitch is laying off 35% of their total work force on Wednesday, as revealed by a now public internal note. This is a major wave of layoffs that’s affecting around 500 employees. It’s far from the first round of layoffs to affect the streamer either. Last year, Amazon eliminated 27,000 jobs too. All these cutbacks come after a flurry of hiring in the expansion during the Covid pandemic.

The company’s Chief Executive expressed that they’d grown too far. Suggesting they had become oversized because of “optimism”. They labelled the layoffs as rightsizing. This is fairly standard language for a lot of layoffs though, rather than simply admitting it’s a cost-cutting measure.

Twitch has seen some turbulence recently. Increased competition is finally hitting them, along with controversy over their approach to adult-orientated entertainment. Plus a new ban system still finding its feet.

Despite this, Amazon has spent significantly on video streaming in recent years, particularly on Prime Video content like acquiring MGM and making the world’s most expensive TV show, a Lord of the Rings prequel. These new layoffs show Twitch isn’t receiving this same kind of investment though, with sweeping cutbacks being made to its workforce. The inability of streamers to get support is already a problem at the platform, this could become worse with less money being spent on the video streaming site.