Amazon-owned livestreaming platform Twitch made dramatic cuts Wednesday, laying off about 35% of its staff. But Twitch isn’t the only gaming company to reveal layoffs barely more than a week into 2024, continuing a grim trend from last year.
Roughly 500 employees were impacted by Twitch’s layoffs, and CEO Dan Clancy explained in a blog post that the company was simply too big to meet its financial goals. Bloomberg first reported the news Tuesday ahead of Twitch’s official announcement.
“Our organization is still meaningfully larger than it needs to be,” said Clancy, explaining that he’s spent the past year trying to make Twitch “a more sustainable business” and that other methods of cost-cutting weren’t enough.
Twitch’s layoffs come as part of an effort to set the company up for longer-term success, its CEO said. Instead of taking its previous optimistic approach, Clancy is now resizing Twitch for more “conservative predictions.”
“This decision, while incredibly difficult and painful, is necessary to ensure that we can continue to serve our streamers sustainably,” Clancy said.
Twitch’s Chief Customer Officer Doug Scott called the layoffs “gut-wrenching.”
“I have total confidence in the long term strength and potential of livestreaming and Twitch’s role within it,” Scott wrote. “While today’s news is gut-wrenching, there is a great future ahead for the business.”
But streamer Ben “CohhCarnage” Cassell, who has 1.7 million followers on Twitch, raised concerns about how Wednesday’s layoffs might impact streamers—the biggest of whom liaise with Twitch staff.
“There is almost zero doubt this will dramatically affect our lives on the platform,” Cassell said.
Twitch parent company Amazon is also laying off “several hundreds” of staff within its Amazon Prime Video and MGM Studios divisions, The Information first reported. Twitch also ended its Crown channel last year, which affected roughly 180 employees, and the company laid off 400 staff in March 2023. Twitch also announced in December that it would shut down its service in South Korea due to it being “prohibitively expensive” to operate in the region.
But Twitch and its media siblings at Amazon are far from the only firms seeing layoffs already this year. Game engine firm Unity announced this week that it is laying off another 25% of its company, or 1,800 jobs, as part of a broader “company reset.” This is more than Unity laid off last year.
A U.S. Securities and Exchange Commission filing states that Unity’s layoffs this month are occurring to “position itself for long-term and profitable growth.”
Like Twitch, Unity also had a difficult 2023. While Unity expanded its Web3 integrations last year, it also announced a new fee structure that enraged game developers, causing the firm to apologize and walk back part of its fee announcement a few weeks later. Shortly after, Unity’s longtime CEO John Riccitiello resigned. And Unity had the most layoffs in 2023 of any game company, cutting about 1,165 jobs.
None of this is good news for the broader video game industry, which saw a staggering 10,500 layoffs in 2023 and 8,500 in 2022, the Game File newsletter reported.
Despite being less than two weeks into 2024, Stray Souls game studio Jukai has already announced its closure, TikTok parent company ByteDance is looking to sell its video game business, Bossa Studios laid off one-third of its staff, and Archiact—the studio behind Doom 3: VR Edition—is also laying off staff.
One game industry layoffs tracker puts the tally of layoffs so far this year at approximately 2,320 people as of the 10th day of 2024.
The game industry’s slew of layoffs and closures isn’t showing signs of slowing down just yet amidst the backdrop of a cooling labor market. And as more game studios adopt the use of generative AI tools and large language models (LLMs), gaming talent and gamers alike have continued to decry AI’s use over concerns that AI work isn’t good for the industry—and that layoffs are poised to continue.
Edited by Andrew Hayward
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Source: https://decrypt.co/212318/twitch-unity-layoffs-keep-grim-gaming-industry-trend-alive-2024
