Twitch has been under fire for laying off over 500 staff and the CEO Dan Clancy has come out to defend the Amazon-owned streaming service.
Clancy has been very active on his Twitch channel lately where he addresses the doubts and concerns of the users after confirming that they have let go of 500 employees. He was attacked with a plethora of questions to which he revealed the financial condition of Twitch and that they have not been profitable in recent times.
Thanks to their parent company Amazon, a financial calamity has been avoided until now but factoring in the cost of running the companies and paying the streamers, they have not been able to see profit in 2023, when the total payout for the content creators amounted to a staggering $1 Billion.
“We’ve implied this before where we need to run it sustainably, but I’ll be blunt, we aren’t profitable at this point,” Clancy said. “Amazon has been extremely supportive of Twitch. A big thing for being sustainable over time is ensuring that we don’t lose money, and that’s a big part of my job, because that’s gonna be what makes sure we can be here for long-term.”
“So while the Twitch business remains strong, for some time now the organization has been sized based upon where we optimistically expect our business to be in three or more years, not where we’re at today. 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.”
The company’s downsizing is solely because it failed to scale at the level it had hoped for. Twitch for the longest time had ruled the streaming industry but now they have serious competitors who are taking streamers away from them and as a result, the number of daily active users is suffering. As things stand, it is tough for the situation to turn around anytime soon and more employees might be shown the door.
Stay updated with the latest news in gaming and esports by signing up for early access to TalkEsport’s Mobile App. Follow us on Twitter and Google News to ensure you never miss the exciting updates.
