5 ms·

Twitch layoffs: Amazon-owned livestreaming platform cutting workforce by 35%

82 points by IndoCanada 3y ago

FrustratedMonky 3y ago
So many tech layoffs in the news. Any idea if this was just over-hiring? Twitch grew during the pandemic didn't it? Now viewership is going down. Is it isolated case of a business normal ups/downs, and not some general "oh my god the tech sector is crashing".
- IndoCanada 3y ago
  Indeed... There are plenty of unfilled jobs.
- yugarinn 3y ago
  Over-hiring adjustments is something I think was more common last year. By now, all companies "needing" layoffs to compensate should have already done so. This feels more like Twitch just really struggling financially, as mentioned in the article.
  - guhcampos 3y ago
    For Twitch in particular I think this is a convergency both over-hiring and post pandemic business reduction. Twitch got really big during the pandemic: lots of people had nothing else to do besides sit on their computers all day playing or watching games. Viewership exploded, creatorship exploded, hiring was easy in remote, so hiring exploded. Post pandemic Viewership has likely tanked as people got back to work and school. Creatorship has also subsided as people can't play games 24/7 anymore, so any revenue growth they would have experienced over the pandemic has been likely off-set by now. They countered that with layoffs last year, as most tech companies did, but their case was not just about laying off the extra hires, they also lost business they could not recoup, so they're downsizing even more.
- beanjuiceII 3y ago
  its just the perfect time to cut fat(even if you don't need to) because when things are good, it looks worse to do cuts
- songbird23 3y ago
  i dont fully understand what amortized means but this[0] article is talking about how it could be the reason for layoffs in 2024 [0]https://blog.pragmaticengineer.com/section-174 https://blog.pragmaticengineer.com/section-174
  - _heimdall 3y ago
    Amortization is basically just a way of splitting the cost of something out over multiple years to change how much you may owe in taxes. In this case, previously software engineers' salaries were considered an operating expense like any other salary, and the full amount of that was used to decrease how much profit you have to pay taxes on. Now you can only write off a portion of the salary, having to split it over multiple years' taxes instead. This is really common with R&D expenses, physical equipment, etc. The big change was that software engineers are now considered an R&D expense rather than someone working to assemble a final product, for example.
    - CoastalCoder 3y ago
      > Amortization is basically just a way of splitting the cost of something out over multiple years to change how much you may owe in taxes. Are there any non-tax reasons that companies, accountants, lenders, etc. would use the concept of amortization? I.e., is there some kind non-tax-related of financial planning that finds the concept of amortization useful for decision-making?
      - _heimdall 3y ago
        As far as I'm aware amortization is only used for tax purposes. I guess you could use the adjusted profits and losses if you had a reason to show lower profits, but as far as financial planning goes the money has already been spent so its largely a game of when you want the expense to show up on your tax bill.
      - ozymandias8 3y ago
        Some business that have spending limits like professional football clubs use amortization to make their spending look lower than it is. They can amortize the cost of new players over the length of that player's contract while accounting player sales as instant profits.
- paxys 3y ago
  Feels to me like tech companies saw how successful their late 2022/early 2023 layoffs were and decided to make it an annual thing.
- brodo 3y ago
  Maybe Twitch and others have finally moved to the "later" phase of the "grow first and make money later" strategy.
- wonderwonder 3y ago
  I have a feeling this is going to continue as AI / LLM's become more capable. I know I am late to the party but was messing around with chatGPT the other day to see if it could help me with a code issue I was stuck on. It blew my mind! I don't see how it and similar LLM's don't lead to massive replacement of tech workers and creatives.
  - ChatGTP 3y ago
    This would imply there is an “end of work”. If these things are so good at augmenting your work, why would Google not keep their engineers, augment them with LLMs and just be more profitable and productive with the same number of people ? What does the lay off part get them ? Why be “just as productive” if you could be moar productive? The fully replacing people thing would be if we had an AGI in which case I’ll be using one to augment myself and stay on top of the game.
    - wonderwonder 3y ago
      Because that's not how the real world works. Any product has a real world limit on the amount of money it can generate. Only so many companies are going to subscribe to product X. There are only so many customers in a particular niche. Your assumption is that generating more work = more profit. The idea that just adding more engineers leads to more money is an obvious fallacy. Cutting engineers though and continuing to receive the same income is an obvious way to increase net profit.
      - ChatGTP 3y ago
        Because that's not how the real world works. Any product has a real world limit on the amount of money it can generate. Yes it is, I’ve never seen “the end of work”, have you ? Google has an unlimited amount of issues to solve. I read about them here everyday. ChatGPT is even an existential threat to their search, if not directly, then through the internet becoming a huge piece of AI spam. LLMs are not why Google is laying people off.
        3y ago
- bmitc 3y ago
  Over-hiring and restructuring explanations, i.e., excuses, are the most lame and slaps in the faces ever. Such reasons are solely management problems and due to management incompetence. I feel that regulation could be helpful here. The employer's side of at will employment should be reduced and other pressures to avoid these situations.
  - lupusreal 3y ago
    Overhiring always being a mismanagement issue due to incompetence is a cute narrative for the labor-vs-capital arguments, but it's not literally true unless you believe that failing to read the future accurately is mismanagement. Management's job is to do the best they can with the forecasts they have, and no reasonable person believes that forecasts can be accurate every time.
    - kavok 3y ago
      Predicting the future is literally a core upper management job duty. It was fairly obvious and should’ve been assumed that interest rates would eventually rise.
    - bmitc 3y ago
      You can rephrase management's duties to "predicting the future" as a way to maximalize the so-called difficulties of their roles, but that's an unrealistic description. And it is in fact management's primary duty to understand the evolution of their organization and to have mitigation strategies. Simply hiring when you can and then firing at the first sign of trouble and when investors throw a hissy fit is about the most amateur, incompetent approach available. A monkey could perform that role better. I was recently laid off just a year after being hired. The layoff was described as not cost cutting but restructuring. The reality is that no restructuring has happened, morale has tanked, and attrition in key positions has occurred. Me being laid off means that management couldn't even plan out a year. Further, this company had a restructuring (i.e., layoff) in 2020 as well. If you need to "restructure" every three years, you don't know how to manage. At will employment is a poor setup because companies hold all the cards. They should have much more pressure on abiding by contracts.
malfist 3y ago
Twitch would probably be profitable if it wasn't required to: * Pay retail prices for AWS * Required to use AWS But of course, Amazon's CEO (ex-AWS CEO) sees no problem with raiding the coffers of a subsidiary to boost AWS's profit. And blaming them for it.
- oldsklgdfth 3y ago
  > Pay retail prices for AWS Is this actually the case for Twitch? How are they different from any other Amazon team using AWS?
  - viraptor 3y ago
    Even if they didn't get internal discount, there's no way they pay retail as in advertised prices. At that size AWS itself would likely want bandwidth commitment for a longer period too.
    - DanielHB 3y ago
      At that size AWS has custom contracts even with non-subsidiaries
    - rescbr 3y ago
      Twitch rans on a separate network. Bulk traffic is not on AWS.
  - lupusreal 3y ago
    My information is some years old, but last I heard other teams at Amazon do at least keep track of what their retail AWS costs would be.
jmyeet 3y ago
Twitch's profitability is an accounting decision. Twitch's IP was transferred to AWS and became IVS [1]. IVS is sold to other companies like Kick. It's a completely subjective decision of how much Amazon charges itself for use of IVS by Twitch. If Amazon lowered the IVS price it charges itself, Twitch would suddenly be hugely profitable. All this shows is Twitch is not an Amazon priority. [1]: https://aws.amazon.com/ivs/ https://aws.amazon.com/ivs/
- liquidpele 3y ago
  Pretty sure most companies use different pricing internally for stuff like this?
- cbg0 3y ago
  Why do you assume they pay sticker price for IVS, if they even use that?
  - jmyeet 3y ago
    Where did I say that? I said that whatever price AWS charges Twitch, it makes Twitch unprofitable. Since this is all just moving numbers around on a spreadsheet, they could choose a different number and Twitch would appear to be profitable. The point is that Twitch being unprofitable is an artifical narrative not an objective reality.
    - temdisponivel 3y ago
      Are you sure this is just moving numbers around? I would expect there to be legal requirements around anticompetitive behaviour. Even if not, your comment seems to imply (to me at least) that the vast majority of Twitch’s operating costs comes from paying AWS (implied in this is the markup for AWS, not the actual costs of running the infra).
    - rescbr 3y ago
      IIRC, this was not how IVS and Twitch worked at least a couple years ago. This was in reverse, AWS was selling Twitch as a product. Twitch is on Amazon's side of the company, not on AWS.
jackwilsdon 3y ago
Also discussed at: https://news.ycombinator.com/item?id=38933315 https://news.ycombinator.com/item?id=38933315
CoastalCoder 3y ago
Did we ever figure out why 15% was the magically common layoff number over the past 18 months or so? By "figure out", I mean something beyond mere conjecture. (Sorry for the tangent. I just thought of it because I noticed this layoff is something other than 15%.)
novagameco 3y ago
A lot of the advertising industry (Twitch is an ad publisher which uses tech, not a tech company) is moving away from high-volume low-intent advertising to low-volume high-intent. It's becoming harder to squeeze pennies out of banner and video ads on platforms like twitch, facebook, youtube, and google ads. Some retailers like Amazon and Walmart make a significant chunk (if not the majority) of their revenue from retail advertising (basically: promoted search results)
- Enginerrrd 3y ago
  >Some retailers like Amazon and Walmart make a significant chunk (if not the majority) of their revenue from retail advertising That explains why amazon search results keep getting worse. I just thought they were having a problem with people gaming the system. That's a pretty anti-consumer use of their large market share and lack of competition in my opinion.
  - novagameco 3y ago
    All ecommerce sites do this if they can; it's just difficult for the smaller sites to normalize product information and share user browsing data across DSPs. Grocery stores have been doing it for decades: when you see a display on the endcap at the end of an aisle, that's a product which has paid Target or Kroger for the prime real estate. The company I work for is working on a retail media system so that smaller ecommerce sites can get paid to promote results by advertisers in the same way that they can get paid to show banner ads: the advertiser knows nothing about the retailer and vice-versa. The advertiser offers their products on our DSP and the ecommerce site makes their inventory available to us on our SSP and we connect the two
    - nradov 3y ago
      So in other words you are contributing to the enshittification of e-commerce, giving the smaller sites the same hostile customer experience as Amazon. I don't blame you, might as well make some money off the trend while you can. But I doubt that this will end well for the sites themselves. If they can't deliver a better experience than Amazon then customers will just stick with Amazon.
deleted 3y ago
[deleted]

82 points by IndoCanada 3y ago

So many tech layoffs in the news. Any idea if this was just over-hiring? Twitch grew during the pandemic didn't it? Now viewership is going down. Is it isolated case of a business normal ups/downs, and not some general "oh my god the tech sector is crashing".

IndoCanada 3y ago
Indeed... There are plenty of unfilled jobs.
yugarinn 3y ago
Over-hiring adjustments is something I think was more common last year. By now, all companies "needing" layoffs to compensate should have already done so. This feels more like Twitch just really struggling financially, as mentioned in the article.
- guhcampos 3y ago
  For Twitch in particular I think this is a convergency both over-hiring and post pandemic business reduction. Twitch got really big during the pandemic: lots of people had nothing else to do besides sit on their computers all day playing or watching games. Viewership exploded, creatorship exploded, hiring was easy in remote, so hiring exploded. Post pandemic Viewership has likely tanked as people got back to work and school. Creatorship has also subsided as people can't play games 24/7 anymore, so any revenue growth they would have experienced over the pandemic has been likely off-set by now. They countered that with layoffs last year, as most tech companies did, but their case was not just about laying off the extra hires, they also lost business they could not recoup, so they're downsizing even more.
beanjuiceII 3y ago
its just the perfect time to cut fat(even if you don't need to) because when things are good, it looks worse to do cuts
songbird23 3y ago
i dont fully understand what amortized means but this[0] article is talking about how it could be the reason for layoffs in 2024 [0]https://blog.pragmaticengineer.com/section-174 https://blog.pragmaticengineer.com/section-174
- _heimdall 3y ago
  Amortization is basically just a way of splitting the cost of something out over multiple years to change how much you may owe in taxes. In this case, previously software engineers' salaries were considered an operating expense like any other salary, and the full amount of that was used to decrease how much profit you have to pay taxes on. Now you can only write off a portion of the salary, having to split it over multiple years' taxes instead. This is really common with R&D expenses, physical equipment, etc. The big change was that software engineers are now considered an R&D expense rather than someone working to assemble a final product, for example.
  - CoastalCoder 3y ago
    > Amortization is basically just a way of splitting the cost of something out over multiple years to change how much you may owe in taxes. Are there any non-tax reasons that companies, accountants, lenders, etc. would use the concept of amortization? I.e., is there some kind non-tax-related of financial planning that finds the concept of amortization useful for decision-making?
    - _heimdall 3y ago
      As far as I'm aware amortization is only used for tax purposes. I guess you could use the adjusted profits and losses if you had a reason to show lower profits, but as far as financial planning goes the money has already been spent so its largely a game of when you want the expense to show up on your tax bill.
    - ozymandias8 3y ago
      Some business that have spending limits like professional football clubs use amortization to make their spending look lower than it is. They can amortize the cost of new players over the length of that player's contract while accounting player sales as instant profits.
paxys 3y ago
Feels to me like tech companies saw how successful their late 2022/early 2023 layoffs were and decided to make it an annual thing.
brodo 3y ago
Maybe Twitch and others have finally moved to the "later" phase of the "grow first and make money later" strategy.
wonderwonder 3y ago
I have a feeling this is going to continue as AI / LLM's become more capable. I know I am late to the party but was messing around with chatGPT the other day to see if it could help me with a code issue I was stuck on. It blew my mind! I don't see how it and similar LLM's don't lead to massive replacement of tech workers and creatives.
- ChatGTP 3y ago
  This would imply there is an “end of work”. If these things are so good at augmenting your work, why would Google not keep their engineers, augment them with LLMs and just be more profitable and productive with the same number of people ? What does the lay off part get them ? Why be “just as productive” if you could be moar productive? The fully replacing people thing would be if we had an AGI in which case I’ll be using one to augment myself and stay on top of the game.
  - wonderwonder 3y ago
    Because that's not how the real world works. Any product has a real world limit on the amount of money it can generate. Only so many companies are going to subscribe to product X. There are only so many customers in a particular niche. Your assumption is that generating more work = more profit. The idea that just adding more engineers leads to more money is an obvious fallacy. Cutting engineers though and continuing to receive the same income is an obvious way to increase net profit.
    - ChatGTP 3y ago
      Because that's not how the real world works. Any product has a real world limit on the amount of money it can generate. Yes it is, I’ve never seen “the end of work”, have you ? Google has an unlimited amount of issues to solve. I read about them here everyday. ChatGPT is even an existential threat to their search, if not directly, then through the internet becoming a huge piece of AI spam. LLMs are not why Google is laying people off.
      - 3y ago
bmitc 3y ago
Over-hiring and restructuring explanations, i.e., excuses, are the most lame and slaps in the faces ever. Such reasons are solely management problems and due to management incompetence. I feel that regulation could be helpful here. The employer's side of at will employment should be reduced and other pressures to avoid these situations.
- lupusreal 3y ago
  Overhiring always being a mismanagement issue due to incompetence is a cute narrative for the labor-vs-capital arguments, but it's not literally true unless you believe that failing to read the future accurately is mismanagement. Management's job is to do the best they can with the forecasts they have, and no reasonable person believes that forecasts can be accurate every time.
  - kavok 3y ago
    Predicting the future is literally a core upper management job duty. It was fairly obvious and should’ve been assumed that interest rates would eventually rise.
  - bmitc 3y ago
    You can rephrase management's duties to "predicting the future" as a way to maximalize the so-called difficulties of their roles, but that's an unrealistic description. And it is in fact management's primary duty to understand the evolution of their organization and to have mitigation strategies. Simply hiring when you can and then firing at the first sign of trouble and when investors throw a hissy fit is about the most amateur, incompetent approach available. A monkey could perform that role better. I was recently laid off just a year after being hired. The layoff was described as not cost cutting but restructuring. The reality is that no restructuring has happened, morale has tanked, and attrition in key positions has occurred. Me being laid off means that management couldn't even plan out a year. Further, this company had a restructuring (i.e., layoff) in 2020 as well. If you need to "restructure" every three years, you don't know how to manage. At will employment is a poor setup because companies hold all the cards. They should have much more pressure on abiding by contracts.

malfist 3y ago

Twitch would probably be profitable if it wasn't required to: * Pay retail prices for AWS * Required to use AWS But of course, Amazon's CEO (ex-AWS CEO) sees no problem with raiding the coffers of a subsidiary to boost AWS's profit. And blaming them for it.

oldsklgdfth 3y ago
> Pay retail prices for AWS Is this actually the case for Twitch? How are they different from any other Amazon team using AWS?
- viraptor 3y ago
  Even if they didn't get internal discount, there's no way they pay retail as in advertised prices. At that size AWS itself would likely want bandwidth commitment for a longer period too.
  - DanielHB 3y ago
    At that size AWS has custom contracts even with non-subsidiaries
  - rescbr 3y ago
    Twitch rans on a separate network. Bulk traffic is not on AWS.
- lupusreal 3y ago
  My information is some years old, but last I heard other teams at Amazon do at least keep track of what their retail AWS costs would be.

jmyeet 3y ago

Twitch's profitability is an accounting decision. Twitch's IP was transferred to AWS and became IVS [1]. IVS is sold to other companies like Kick. It's a completely subjective decision of how much Amazon charges itself for use of IVS by Twitch. If Amazon lowered the IVS price it charges itself, Twitch would suddenly be hugely profitable. All this shows is Twitch is not an Amazon priority. [1]: https://aws.amazon.com/ivs/ https://aws.amazon.com/ivs/

liquidpele 3y ago
Pretty sure most companies use different pricing internally for stuff like this?
cbg0 3y ago
Why do you assume they pay sticker price for IVS, if they even use that?
- jmyeet 3y ago
  Where did I say that? I said that whatever price AWS charges Twitch, it makes Twitch unprofitable. Since this is all just moving numbers around on a spreadsheet, they could choose a different number and Twitch would appear to be profitable. The point is that Twitch being unprofitable is an artifical narrative not an objective reality.
  - temdisponivel 3y ago
    Are you sure this is just moving numbers around? I would expect there to be legal requirements around anticompetitive behaviour. Even if not, your comment seems to imply (to me at least) that the vast majority of Twitch’s operating costs comes from paying AWS (implied in this is the markup for AWS, not the actual costs of running the infra).
  - rescbr 3y ago
    IIRC, this was not how IVS and Twitch worked at least a couple years ago. This was in reverse, AWS was selling Twitch as a product. Twitch is on Amazon's side of the company, not on AWS.

jackwilsdon 3y ago

Also discussed at: https://news.ycombinator.com/item?id=38933315 https://news.ycombinator.com/item?id=38933315

CoastalCoder 3y ago

Did we ever figure out why 15% was the magically common layoff number over the past 18 months or so? By "figure out", I mean something beyond mere conjecture. (Sorry for the tangent. I just thought of it because I noticed this layoff is something other than 15%.)

novagameco 3y ago

A lot of the advertising industry (Twitch is an ad publisher which uses tech, not a tech company) is moving away from high-volume low-intent advertising to low-volume high-intent. It's becoming harder to squeeze pennies out of banner and video ads on platforms like twitch, facebook, youtube, and google ads. Some retailers like Amazon and Walmart make a significant chunk (if not the majority) of their revenue from retail advertising (basically: promoted search results)

Enginerrrd 3y ago
>Some retailers like Amazon and Walmart make a significant chunk (if not the majority) of their revenue from retail advertising That explains why amazon search results keep getting worse. I just thought they were having a problem with people gaming the system. That's a pretty anti-consumer use of their large market share and lack of competition in my opinion.
- novagameco 3y ago
  All ecommerce sites do this if they can; it's just difficult for the smaller sites to normalize product information and share user browsing data across DSPs. Grocery stores have been doing it for decades: when you see a display on the endcap at the end of an aisle, that's a product which has paid Target or Kroger for the prime real estate. The company I work for is working on a retail media system so that smaller ecommerce sites can get paid to promote results by advertisers in the same way that they can get paid to show banner ads: the advertiser knows nothing about the retailer and vice-versa. The advertiser offers their products on our DSP and the ecommerce site makes their inventory available to us on our SSP and we connect the two
  - nradov 3y ago
    So in other words you are contributing to the enshittification of e-commerce, giving the smaller sites the same hostile customer experience as Amazon. I don't blame you, might as well make some money off the trend while you can. But I doubt that this will end well for the sites themselves. If they can't deliver a better experience than Amazon then customers will just stick with Amazon.

deleted 3y ago

[deleted]