Despite the new announcements surrounding CES of the partnership between Twitch and OBS to reduce encoding costs, Twitch is back on the layoff block here early in 2024. One of the largest costs Twitch has is encoding servers. Encoding allows you to watch streams on varying devices with different speeds of internet connections in the best quality possible. Twitch CEO offered some reasoning behind the decision here in this blog post.
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. 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.
While Twitch says this is to ensure costs stay in check for the company’s longevity. We must remember that Twitch already had a round of layoffs early in 2023. Is this a sign that streaming is losing some of its popularity?
