Twitch reportedly has yet to turn a profit ten years down the line with Amazon seemingly eyeing more layoffs

Twitch has reportedly failed to turn a profit after ten years of being acquired by tech giant Amazon, as per a report by Wall Street Journal made on July 29, 2024. Reportedly, Twitch is facing a lack of growth in new users and engagement, along with decreased spending from its existing users.

This comes after the live-streaming service underwent major layoffs at the start of this year, cutting 500 jobs and shrinking its workforce by a whopping approximately 35%. Despite such drastic changes, Twitch reportedly has continued to be unable to turn a profit for its parent company.

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Twitch reportedly risks being put on the back burner by Amazon amidst profit woes

Twitch is reportedly facing the risk of becoming a "zombie brand" under Amazon (Image via Twitch)

Livestreaming giant Twitch is reportedly in deep water as current and former employees working for the broadcasting company have made claims regarding its inability to generate profit. Further, speculations are now reportedly rife among the company's staffers regarding a possible third round of layoffs, following the two major ones that occurred within the past year. As insiders stated, the third layoffs could come around this year's fall after an "annual operational review".

On the other hand, the risk of possibly becoming a "zombie brand" under Amazon's roster of companies is looming over Twitch, that is, it may end up as one of its undertakings that have been pushed aside and sidelined due to its inability to perform as expected. This would mean the platform could be joining the ranks of other Amazon brands like GoodReads, Mechanical Turk, and Woot.

An Amazon spokeswoman has reportedly stated that the brand continues to remain hopeful regarding Twitch, and is looking at it from a "long-term" perspective. The report also underlines the "expensive" nature of the livestreaming website's everyday processes, including hosting thousands of concurrent broadcasts and deploying moderation to ensure content meets its guidelines.

These expenses, along with the lack of money being spent by users, have significantly contributed to the current situation that Twitch reportedly finds itself in.

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During his statement regarding the layoffs earlier this year, Twitch CEO Dan Clancy stated that the company was "not profitable". He had also denied any possibility of the company being "axed" by Amazon, citing that the e-commerce giant was "investing heavily" into Twitch.