Twitch cuts jobs as it plans ‘aggressive growth strategy’

Amazon’s livestreaming platform Twitch has confirmed to GamesBeat that it has laid off a number of employees. Twitch reportedly cut more than 25 people from its Twitch Studios and marketing teams, according to esports-industry insider Rod “Slasher” Breslau — although the company did not confirm that figure.

A Twitch spokesperson explained in a statement provided to GamesBeat that the layoffs are a result of the company shifting resources to prioritize segments that livestreamers and viewers care about the most.

Here’s the Twitch spokesperson’s full statement:

“Coming off the record-setting numbers shared in our 2017 Retrospective, Twitch is continuing to grow and advance with success stories from Overwatch League to Fortnite’s milestone-setting streams. In order to maintain this momentum, we have an aggressive growth strategy for 2018 with plans to increase our headcount by approximately 30 percent. While we’ve conducted team adjustments in some departments, our focus is on prioritizing areas most important for the community.”

So Twitch plans to continue hiring, and a source told me the company currently has 1,500 employees. But it may not put more people into certain groups within Twitch. In a tweet, Slasher said that the company told its staff that it had “overhired.” And Twitch’s comment echoes that sentiment.

Twitch laid off more than 25 people from the Twitch Studios and Community/Marketing teams yesterday, including several high-profile employees who have been with the company since Twitch began, sources said. People were told that Twitch had 'overhired', and this was to re-adjust.

— Rod Breslau (@Slasher) March 30, 2018

Twitch is amid a growth spurt in terms of viewers. The Fortnite: Battle Royale phenomenon led to record audiences for certain streamers including a particular broadcast where the rapper Drake played the game live on the site. This has people showing up in huge numbers, and it has also turned into big paydays for streamers. Tyler “Ninja” Blevins, who played with Drake, makes $500,000 a month from more than 200,000 subscribers. Each of those $5 subscriptions nets $2.50 for Twitch and $2.50 for Ninja.

Many people, however, don’t pay anything extra at all. Instead, they use the Twitch Prime service that gives each person who connects an Amazon Prime account a single subscription to use on any Twitch channel. Most of the $500,000 that Ninja generates each month comes from Twitch Prime subscriptions, and Amazon has to pay the $2.50 to streamers.

While this model is creating massive incentives for creators to use Twitch, the company may see increased spending on its other products. Once a person subscribes with a Twitch Prime account, maybe they then spend real money on a standard $5-plus sub. Or maybe people will put money toward Twitch’s Bits tipping system that it also takes a cut of.

But as Twitch continues to experiment with its business model, it has less of a need to produce and market its own content. The company’s streams are nowhere near as popular as people like Ninja. And Twitch seems most concerned with growing those community creators more than anything else.