Amazon's Twitch is not ‘profitable’, claims platform's boss Dan Clancy (2024)

Twitch CEO Dan Clancy has addressed the company’s situation after revealing that more than 500 employees will be laid off.

The streaming platform announced earlier this week that it will reduce its staff by about 35%, adding to the 400 cuts made last year. Clancy wrote in a blog post that “we still have work to do to rightsize our company”.

He explained that Twitch “is still meaningfully larger than it needs to be given the size of our business.” He said that Twitch paid over $1 billion to streamers in 2023.

“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.”

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“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,” he cited.

‘We aren’t profitable at this point’: Clancy

In a livestream, Clancy admitted that Twitch is not making a profit and that Amazon, its parent company, has been backing it up.

“I’ll be blunt: we aren’t profitable at this point,” Clancy said.

“Amazon has been extremely supportive of Twitch. Big thing for being sustainable over time is ensuring we don’t lose money. That’s a big part of my job because that’s going to be what makes sure we can be here for the long term.”

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Trouble for Twitch is not over yet

Twitch has faced competition from rivals like Kick, which has lured away some of its popular streamers with lucrative contracts. For example, xQC, also known as Félix Lengyel, signed a huge multi-year deal with Kick last year, reportedly worth around $100 million.

Clancy said Twitch was not interested in offering such deals to streamers, arguing that they are not economically viable.

“The cost of retaining those streamers would have been far more than the revenue generated from them,” he said.

“That is something we’ve been very clear about. We don’t want to do that.”

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Clancy also assured that there is no danger of Amazon shutting down Twitch, despite its lack of profitability.

“The answer is emphatically no,” Clancy answered to a question from chat. “Not at all. Amazon is very bullish on Twitch. They’ve been investing heavily in Twitch.”

Twitch’s troubles are not over, as the San Francisco Chronicle reported this week that Twitch is looking to shrink its expensive San Fran headquarters.