Amazon-owned streaming service Twitch has announced that it will shut operations in South Korea on Feb. 27, 2024. According to the platform, high operating costs and network fees are the most significant drivers behind its decision. The company has operated at a loss in the country and does not see a way forward.
CEO Dan Clancy stated, “Twitch has been operating in Korea at a significant loss, and unfortunately, there is no pathway forward for our business to run more sustainably in that country.”
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Clancy highlighted that network fees in South Korea are ten times more expensive than most other countries. Clancy added that Twitch has taken significant steps to reduce operating costs to remain in business.
Is Twitch in a ditch?
Twitch’s troubles are nothing new. The streaming platform laid off 400 employees in March of this year, which was a move to improve its business outlook in the long term. The move was also due to the platform’s inability to meet revenue expectations. Moreover, the layoffs were a part of Amazon’s decision to reduce its workforce by 9000 people.
At the time, Clancy had stated, “Like many companies, our business has been impacted by the current macroeconomic environment, and user and revenue growth has not kept pace with our expectations.“
Clancy had taken the role of CEO shortly after the layoffs. Twitch’s previous CEO, Emmett Shear, had stepped down a few days earlier to spend time with his family.
Twitch went through another round of layoffs in October 2023, albeit less than that of March. Amazon CEO Andy Jassy stated, “Given the uncertain economy in which we reside and the uncertainty that exists in the near future, we have chosen to be more streamlined in our costs and headcount.“
Despite streaming being a booming industry, it appears Twitch is not immune to layoffs and the shutting of operations.