Twitch CEO Dan Clancy says platform isn’t “profitable” days after widespread layoffs

Just days after Twitch laid off a reported 500 employees, CEO Dan Clancy broke his silence on the situation, streaming a live Q&A in which he detailed how the platform’s struggle for profitability led to the culling.

2024 started on a somber note for the entertainment industry as Twitch laid off what’s reported to be its most significant batch of staff members to date. Roughly 500 workers were let go, according to Bloomberg reports, equating to 35% of the company’s total workforce.

Naturally, many were shocked at the development to start the new year, with streamers devastated by the news while others at rival platforms took the opportunity to pour salt in the wound.

Now speaking from atop the company, Twitch CEO Dan Clancy faced the music in a January 11 broadcast on the platform, delving into the reasons behind the layoffs in a live Q&A.

For the most part, Clancy explained how the layoffs came as a result of Twitch’s supposed overgrowth in recent years. “In terms of making the decision, we need to make sure Twitch is the right size so we can be here for a long time,” he began.

“We have a very important mission. It’s critical Twitch is not just here today, tomorrow, but 50 years, 100 years from now.

Our job is to run Twitch in a manner to ensure its prosperity and that it can be here for the communities you’ve built.”

While admitting the layoffs were a significant blow on a personal level, as many Twitch staff also house their own communities on the platform, Clancy claimed the workforce simply grew too large in recent years.

“The bottom line is, we were bigger than we needed to be, in terms of the size we needed to be to service your needs.”

Speaking from his experience in the CEO role, he detailed how tech companies supposedly “size their organization for where they might be in three or four years.” This is allegedly how Twitch functioned at the height of the global crisis a few years prior.

Now a few years removed from that point in time, it became clear they scaled incorrectly, according to Clancy. “We need to run the company based on where we’re at today.”

Not only that, but in its current state, the CEO also shared the company isn’t turning a profit at this stage. “I’ll be blunt, we aren’t profitable at this point,” he confirmed.

So while “[Twitch] still has enough resources” to operate moving forward, he admitted the company “won’t be able to do as much as [it] could have done before.”

Clancy discusses the Twitch layoffs from the 00:08:00 timestamp below.

Ultimately, the gears are still turning at Twitch despite its drastic reduction in headcount, and the company has plans to “share more” about its outlook on 2024 in the coming weeks.

But failing to make money hand over fist, allegedly scaling up too far, and now significantly dwindling the workforce is all sure to have dramatic implications for Twitch moving forward.