"Our organization is larger than it needs to be": Twitch CEO confirms impending layoffs, justifies cutting workforce in blog

Twitch CEO Dan Clancy has confirmed previous reports of layoffs to "rightsize" the company and has explained the motivation behind letting people go in a blog post on January 10, 2024. In it, he directly addresses the whole community and shares an email he sent to his employees.

In the email, he states that the decision was made due to the organization being "meaningfully larger than it needs to be." More specifically, here's what Dan wrote in the email:

"I know many of you are wondering why this is happening. Over the last year, we’ve been working to build a more sustainable business so that Twitch will be here for the long run and throughout the year we have cut costs and made many decisions to be more efficient. Unfortunately, despite these efforts, it has become clear that our organization is still meaningfully larger than it needs to be given the size of our business."

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Twitch CEO Dan Clancy confirms "just over 500" layoffs across the company

Twitch CEO Dan Clancy's post comes after previous reports suggested that this platform planned to lay off 35% of its workforce. In response to them, Kick co-owner Bijan Tehrani stated that Kick would "eventually" buy out Amazon's streaming platform.

Dan mentioned in the email he sent to his employees that the company had made the "difficult decision" of reducing its employee headcount by 500. Here's what he said:

"Unfortunately, we still have work to do to rightsize our company and I regret having to share that we are taking the painful step to reduce our headcount by just over 500 people across Twitch."

In the email, Dan talked about one of the biggest changes that led to this decision and how Twitch was now being sized based on its current scale of business. Here's what he said:

"Last year we paid out over $1 billion to streamers. 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 3 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."

He further stated that he would host a stream on the purple platform on Thursday, January 11, at 1 pm PT to address any questions the community may have about this decision's impact.

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Reactions to the major announcement by Dan

Netizens speculated about the validity of the reasons behind the layoffs. Many expressed their disappointment, and some even criticized Dan and Amazon for the decision.

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In the blog post, Dan Clancy gave specific instructions to employees being affected by these layoffs. He also made it a point to express his disappointment regarding a previous report by Bloomberg, which had suggested the layoffs were coming and had caused panic among the streaming platform's employees.