For Twitch, the live-streaming platform watched by over 30 million viewers each day, 2022 was not an easy year. Now, with the company set to lay off hundreds of employees in the next few weeks, it’s feeling the impacts of tumult — and bracing for more.
How Twitch lost its way
The platform’s recent moves have confused and upset creators, fans and staff alike
Now, 2023 has gotten off to an eventful start: Last week, following the birth of his first child, longtime CEO Emmett Shear announced that he would step down from his position. Several days later, new Twitch CEO Dan Clancy said the company will be laying off more than 400 employees out of a total of around 2,500.
Delivering live video content to millions of people, 24 hours per day, is expensive, and as Twitch grows, it incurs greater costs. But Twitch’s moves in pursuit of profitability have confused and upset creators, fans and staff. Creators have decried new monetization schemes that put the onus on them to run more ads.
“Twitch is trying to grow and be profitable,” one current Twitch employee said, speaking on the condition of anonymity because they were not authorized to speak on these matters publicly. “So they’re trying to bring in people that have that on their résumé — that they’ve done it at other companies. But what worked there doesn’t necessarily work at Twitch.”
Twitch has had some significant successes in the last year. It quickly removed the live stream of the shooting at a Buffalo supermarket in which 10 people were killed. Following news reports on its failure to protect children from online predators, Twitch released new anti-child predation measures like mandatory phone verification for potentially vulnerable accounts. The company also offered new tools such as viewer ban information that can be shared between streamers to aid in the ongoing battle against bot-powered “hate raids,” in which trolls overwhelm streamers’ chats with fake accounts that spam hateful messages. But to many users and streamers, the company — which enjoyed a huge boost in viewership at the start of the pandemic — has appeared to hit a slump, offering little to remind them of why they’re on Twitch in the first place.
Ten current and former Twitch employees spoke to The Washington Post about the company’s leadership and strategy. Seven spoke on the condition of anonymity because they weren’t authorized to speak on these subjects publicly. Most were critical of the company’s management and the direction they planned for the streaming platform. (Twitch is owned by Amazon, whose founder, Jeff Bezos, owns The Post.)
“When was the last time you saw Twitch introduce something that revolutionized the live content community, the creator ecosystem or the content economy?” former Twitch director of emerging content Zachary Diaz said to The Post. “That’s not to say that a lot of really good Twitch products haven’t been built. People often forget that Twitch has one of the largest content delivery networks in the world. But I don’t think a lot of people value infrastructure.”
Twitch declined to comment on specific claims from employees. It also declined to comment on broader challenges facing the platform, pointing to past interviews with executives from late 2022.
‘A bet against creators’
In its early days, Twitch managed the unlikely: getting an audience that doesn’t like to pay for content to shell out for subscriptions to their favorite streamers’ channels. Supporting streamers with subscriptions, and in turn supporting Twitch, became a part of the site’s culture.
“One of the reasons I wanted to work at Twitch was because of subscriptions,” a current Twitch employee said. “It’s one of the best business models on the internet. … Subs are a huge part of Twitch’s monetization strategy and its DNA as a company.”
But in 2019, two of Twitch’s biggest stars — Tyler “Ninja” Blevins and Michael “Shroud” Grzesiek — departed after signing deals to exclusively stream for Twitch’s Microsoft-owned rival, Mixer. Despite the defections, Twitch viewership held steady; in 2020, Twitch viewership skyrocketed to its highest point ever.
Microsoft shuttered Mixer in 2020. But as Blevins and Grzesiek both eventually made their way back to Twitch, Shear and other Twitch executives decided to shift their strategy, according to several current and former employees. Instead of paying a premium for top talent, the company offered its big streamers less lucrative contracts.
“It was a bet against creators,” one former employee said. “That was Emmett’s hypothesis: We didn’t need to be paying millions of dollars. It wasn’t necessarily that we didn’t fully need [big streamers]. It was that they don’t have anywhere else to go. And we need to be profitable.” Twitch declined to make Shear available for comment.
Twitch executives came to view departures of big-name streamers as an opportunity, according to employees.
“Truthfully, Twitch is not too upset when top creators leave. Whenever a top creator hits what I like to call the ‘purple ceiling,’ they leave or they don’t stream as much, which allows other creators to grow to be in the top,” one former employee said, referring to the moment when creators reach the zenith of their popularity on Twitch and either move on or burn out. “[With] Ninja leaving, I think we saw five or six new stars come out of that.”
Kai Cenat, this past year’s breakout Twitch star, attracted more than 300,000 paid subscribers — breaking Twitch’s subscription record — without much investment from the company, according to one current employee.
“[We] didn't make a custom deal,” the Twitch employee said. “A year later, he's the number one [most subscribed] streamer on the platform, which is wild.”
Cenat has proved to be a massive success, but one former Twitch employee, whose team brought Cenat into the Twitch fold as part of a strategy to recruit more women and people of color, says it still felt like their team was “swimming against the tide versus getting full support.” They say they believe more investment from Twitch would’ve multiplied that success.
“The point,” the former employee added, “is that Twitch could have 10 more Kais by now if they were a lot more intentional about expanding their market to reach broader audiences.”
‘Cut costs, cut costs, cut costs’
Twitch’s current approach is in part a product of scale: No company would ever be able to give personalized attention to partnered creators like Twitch did when there were only thousands, not millions, of creators. But the bigger issue, in the eyes of some in Twitch’s community, is one of direction.
An influx of senior executives, who some current and former employees say treat Twitch like just another tech company, has contributed to a feeling of malaise and displeasure with the platform.
Several current and former employees pointed to Constance Knight, who served as VP of global creators. Knight, a former YouTube exec who also had a brief tenure at Instagram, joined Twitch in July 2021, focusing on the platform’s partnered creators, including some of the biggest names on the platform.
Under Knight, those current and former employees allege, that team wound up rudderless. Some former employees said they felt the executive was broadly unsympathetic to the needs of creators.
“The direction we’d gotten from her over the course of her tenure was, 'Cut costs, cut costs, cut costs,’” a current employee said.
Knight did not reply to multiple requests for comment. Twitch also declined to comment on Knight and other claims made by current and former employees.
In a January 2022 email viewed by The Post, Knight wrote that burnout — a pervasive issue among longtime Twitch streamers — was not a valid reason for creators to not meet contractual obligations. She claimed that employees waiving monetary penalties could cost Twitch over $1 million per year. While some Twitch employees had previously opted to not penalize streamers for burnout-born breaches, Knight said she was putting an end to that practice.
Mark “Garvey” Candella, a former Twitch employee, characterized Knight as an impediment to his work and the work of others.
“I worked with her for seven months, and we never got any kind of team-based strategy — how we want to work together,” said Candella, who led Twitch’s student team and had been at Twitch for eight years before he resigned in July. “And she didn’t want to give any of her allocated budget to anybody on the team.”
In August, one now-former employee who spoke to The Post sent an email to Twitch higher-ups describing a pattern of complaints to HR and departures from the company relating to Knight’s management style. Within the previous six months, they wrote in the email, which was viewed by The Post, 12 Twitch employees had gone to HR or logged complaints with their superiors over Knight. Five had left the company citing Knight as a reason, the email alleges. One employee who directly reported to her requested that their whole team be transferred out from under her, the email states.
Candella and another employee also told The Post that they resigned in protest of Knight’s management style and decision-making.
The employee who wrote the email had previously been critical of Knight’s management practices. They were dismissed from Twitch shortly after sending it. Current and former employees who spoke to The Post believed it to be retribution. The company saw over 300 employees leave in 2021 and more than 60 depart in 2022 as of March 2022, according to a report by Bloomberg News.
Knight herself left Twitch in September.
Current and former employees said Knight was not the only example of an out-of-touch leader at Twitch.
“It’s a broader issue at Twitch,” a former employee said. “There’s been plenty of crappy leaders who leave Twitch that nobody said anything about.”
‘Why advertise on Twitch?’
Ads are broadly unpopular among viewers of all kinds of media, but Twitch streamers are uniquely opposed to them. Many streamers fear that if a viewer comes to a new channel and immediately hits an ad, they might just leave. Ads can also interrupt a broadcast’s biggest live moments, such as when a streamer completes a run of a difficult game or hits a big subscriber milestone.
But Twitch has put pressure on creators to run ads, launching an incentive program in 2022 that presents streamers with personalized payment offers in exchange for a month’s worth of hours streamed — which Twitch has since changed to add more flexibility but also uncertainty in terms of pay.
Alongside the increased pressure for streamers to run ads, four current and former employees say Twitch’s ad service lags behind competitors like YouTube and Facebook.
“Everybody thinks that your phone spies on you with your microphone,” former Twitch software engineer Theo Browne said. “It doesn’t. But it’s doing something scarier based on your behaviors, your persona, the things you’re interested in: predicting what you’re talking about.”
But while YouTube and Facebook can do this, “Twitch does not have anything resembling this power,” Browne said, leading to situations in which Twitch serves a large number of ads that are irrelevant to viewers’ interests.
Devin Nash, whose agency, Novo, has helped brands cut ad deals with Twitch and YouTube, said advertisers on Youtube can target specific categories — gaming, for example — and demographics, down to a level of frightening specificity. But on Twitch, advertisers pay to target all of Twitch, and they have to do so by communicating with human employees rather than utilizing automated systems that platforms like YouTube use. This proves costly and takes extra time.
“For the exact same demographic and better targeting, you’re [spending less] on YouTube,” Nash said. “So why advertise on Twitch?”
“We just see brands uninterested in spending on Twitch ads when there's so many good options out there,” he said.
Nash noted that it’s possible for brands to exclude certain Twitch categories to somewhat dictate where their ads appear. A current Twitch employee added that the site now features rudimentary targeting — if a brand wants to advertise to somebody who bought an Xbox on Amazon, for example — but it’s new and, for a time, didn’t always work, which irritated brand reps. (That reliability issue, the current employee said, has since been fixed.)
This week, Twitch announced that as part of Amazon’s latest round of layoffs, it will be letting go of over 400 employees. In a brief post, Clancy — Twitch’s new CEO — chalked this up to “the current macroeconomic environment” and the fact that “user and revenue growth has not kept pace with our expectations.”
Twitch’s chief monetization officer, Mike Minton, told The Post at TwitchCon in October that the site’s current approach to ads is not its endgame. His goal is to help streamers take ad breaks at better times and remove ads from the streamer discovery process altogether. For both creators and advertisers, he hopes to streamline the process.
“The future is clearly more of self service, more targeted [ads] based on interests, demographics, etc. — at scale versus dealing with a human, for sure,” Minton said.
Former employees said Twitch is a company where teams often take ownership of individual projects, which they felt could be to the detriment of wider communication and collaboration. This structure, alongside uncertainty about where Twitch fits in Amazon’s grander plans, has led to miscommunication and features that failed to find their audience.
“I think Amazon looked at Twitch at first and was like, ‘Cool, it’s going to be the future of content and games. We can invest in that,’” said Diaz, the former director of emerging content. “But that didn’t pan out, so then it decided Twitch could be the future of white-label tech solutions for live-streaming. But it seems like that didn’t take off as much as Amazon needed it to. So the question is, what unlocks the real potential of Twitch’s value to Amazon?”
Multiple current and former employees pointed to the state of clips and drops — two of Twitch’s most popular features — as an example of how the company continues to take swings in questionable directions. The former allows streamers and viewers to quickly highlight and share big moments, while the latter lets developers grant in-game rewards to viewers who watch particular streamers play their game. Both are powerful promotional tools that have put numerous creators and games on the map.
But current and former employees said clips and drops have at various points over the past few years been put into “maintenance mode,” an Amazon term for when a product still needs to be able to function and scale but should no longer be a target for major innovation or overhauls.
At TwitchCon, Twitch’s chief product officer, Tom Verrilli, confirmed this to The Post but added that clips have recently been moved back into active development.
These initiatives seem to be bearing fruit: In a January post about the year ahead, Verrilli and Minton mentioned that Twitch is working on tools that make it easier to edit Twitch clips for short-form platforms like TikTok, pinned clips for streamer’s channels, and a mobile discovery feature that will let prospective viewers scroll through a feed of streams and clips. The latter feature in particular has been long requested by streamers, viewers and Twitch employees, and its announcement was met with immediate excitement by some streamers.
Current and former employees are surprised it took so long for clips to leave maintenance mode, especially given the focus on Guest Star, a tool that lets streamers bring viewers on stream. Guest Star was meant to be last year’s big new feature, receiving onstage promotion during TwitchCon’s keynote, but it remains in a beta test state and has yet to gain much traction among streamers.
“People had asked at the top of the pandemic, ‘Can we have basically group phone calls on stream?’” one former employee said. “It took [Twitch] two years to do that.”
Speaking to The Post in October, Verrilli said of Twitch’s development process on new features: “I think there are plenty of critiques about whether or not certain products hit the mark at the time. And anytime we have a product that kind of fails, there’s always the question of, ‘Was it a bad idea or bad execution? Or was it a good idea with good execution but not its time yet?’ … as a product manager, that’s the everyday challenge.”
A current employee pointed out that Amazon used Twitch drops to great success when it launched fantasy MMO “New World” in 2021: “[Drops are] so powerful,” they said. “Why the hell is it in maintenance mode? Our parent company can see the value of this product.”
One former employee characterized Twitch’s cautiousness and lack of willingness to go all in on features as a central issue in a time when the company is leaning on creators to foot its bills more than ever.
“Being really proactive about expanding into more diverse content, more diverse creators — trying to diversify your business models, whether it’s things like short-form video monetization or e-commerce — those are the ways you grow the revenue,” the former employee said. “If you’re able to grow the top line by being more imaginative and creative and bold, then there’s less of a need to squeeze creators.”
Minton said Twitch isn’t 100 percent ruling out anything when it comes to monetization.
“We’re looking at all options that could be helpful,” Minton said. “For us, we’re very focused on growing the pie and making sure that streamers make more money, because if streamers make more money, we make more money.”
However, before this week’s layoff announcement, there was already a feeling among some Twitch staff that amid a push for profitability and economic uncertainty, Twitch itself was in a sort of maintenance mode.
“I think the focus right now is running a more efficient business, cutting costs, surviving the recession and not laying people off,” a current employee said before the announcement of the layoffs. “Kind of slowly chugging along.”
Now, with layoffs looming, change is afoot.
“As a company focused on building community together, this decision was incredibly difficult and one we did not make without considerable thought,” Clancy wrote in his post about the layoffs. “We take this responsibility incredibly seriously and sometimes need to make extremely hard decisions to ensure we protect our business in order for Twitch to be around for a long time.”