By Alexander Lee • January 12, 2024 • 4 min read •
Ivy Liu
2024 is not off to an auspicious start for Twitch, the internet’s top livestreaming platform.
Although Twitch remains the most popular destination for online livestreaming, the past year has been fraught with difficulties for the Amazon-owned platform. Following its acquisition nearly a decade ago in 2014, Twitch has struggled to consistently turn a profit, publicly jockeying with streamers and influencers over its cut of advertising revenue last year.
Twitch co-founder and former CEO Emmett Shear stepped down in March 2023, and the platform announced plans to shut down its services in South Korea in December 2023. The company has also undergone a series of layoffs in recent years — including a cut of about 500 workers earlier this week, as reported by Bloomberg. And amid these seismic shifts, rising competitors such as YouTube and the insurgent livestreaming platform Kick are threatening to take a bite out of Twitch’s market share.
At the moment, Twitch makes the bulk of its revenue via advertising, as well as a cut of streamers’ subscription payments and other digital products. But these revenue streams are increasingly threatened. While Twitch remains a go-to destination for brands looking to flex their advertising budgets in front of gamers, it has lost its role as a central hub for the streaming community, with many streamers and their subscribers jumping ship for alternative platforms over the past year.
Here’s a look into some of the most relevant numbers surrounding Twitch’s recent layoff and challenges going into the new year.
Tuesday’s layoff of 500 staff — representing roughly 35 percent of Twitch’s total workforce — officially made 2024 the company’s third year in a row with layoffs. Following a pandemic-fueled explosion in gaming and livestreaming engagement in 2020 and 2021, Twitch’s head count stood at an all-time high of roughly 1800 by the end of 2022, a number that may have been perceived as bloated by upper management at Amazon.
The first cracks in the facade appeared in November 2022, when Twitch laid off an unannounced number of staff on its recruiting team and announced plans to reduce hiring in 2023. The layoffs began in earnest, with Twitch cutting 400 staffers in March 2023 as part of a broader restructure at Amazon. This week’s cull of 500 staff means Twitch is down roughly 1,000 employees in the last 12 months, a total reduction of nearly 50 percent.
The chart above shows monthly hours watched on Twitch for the months of August, September, October and November in 2022 and 2023, courtesy of data from StreamElements and Streams Charts.
Overall, the data shows that hours watched on Twitch have roughly plateaued for the past year, following years of sustained viewership growth for the platform. Although Twitch remains the most popular livestreaming service by a fair margin, competitors such as Kick have grown considerably over the past year, making them an increasingly threatening alternative to Twitch if trends continue in this direction.
According to numbers from GWI, one in 10 internet users globally tuned into Twitch on a monthly basis during its peak in Q2 2021. Since then, as the world has gradually thawed from COVID lockdown, the platform’s popularity has declined by a third.
“I think that that peak coincided with a lot of peak pandemic trends, which I think is indicative of what’s happening right now,” said GWI trends manager Matt Smith. “It’s not necessarily like everything’s dying and collapsing — it’s more of a correction to the mean.”
GWI also shared the data above, which shows how the sentiments of media and tech workers in the United States, United Kingdom, France, Spain and Germany regarding their biggest challenges have changed over the past two years, with percentage figures showing how many tech workers believed each of the listed challenges was the most significant in 2021 and 2023. (The sample sizes for the surveys were 304 in 2021 and 331 in 2023.)
Although the above numbers are relevant to the entire media and tech space, not specific to Twitch, they help provide some context into the decision-making processes among Twitch higher-ups over the past few years. One particularly notable figure is the 73 percent decrease in media and tech workers who believe scaling rapidly is their biggest challenge — from 8.2 percent of survey respondents to only 2.2 percent.
During the early years of Twitch, scale was the sole focus, with the idea that monetization would come easily once the platform established dominance. Twitch has now been dominant for years — but that dominance comes with steep overhead costs for running livestreaming data servers, making it ever more difficult for Twitch to turn a profit as it scales. In 2024, Twitch is moving away from a focus on scaling in favor of austerity and budget responsibility.
“Ultimately, it’s part of a larger trend that we’ve seen across the tech industry,” Smith said. “Over the last six months, we’ve seen many companies lay people off, and then see their stock prices rise because they’re running more lean processes, or trying to do more with less.”
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