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Twitch.tv Lays of 400 Employees

blog.twitch.tv

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Re: Twitch.tv Lays of 400 Employees

#11

Post by gretch »

gtirloni wrote: post #3

> Like many companies, our business has been impacted by the current macroeconomic environment I must be living under a rock because, outside big tech self-inflicted wounds, I don't know what they are talking about. Is it Ukraine? SVB? Chinese housing market?

Federal reserve interest rates.

When interest rates are low, money flows more freely. When interests rates are up, it's harder to lend/borrow, money flows less freely, and the economy cinches up as a whole. This is a major simplification to a very complex system, but it happens because e.g. as someone with money, you'd rather just put it into a government bond that will for sure pay you 4%, rather than chasing speculative investments. When that same bond is only paying out 1%, you might be more inclined to put your money in a start up and see what happens.

Re: Twitch.tv Lays of 400 Employees

#12

Post by nonethewiser »

runnerup wrote: post #9
vkou wrote: post #4

Earlier quoted context omitted.

The macroeconomic trend is 'the stock price went down because the fed stopped printing money'.

I don’t understand how this is affecting AMZN’s cash flow though. Seems like both their costs and revenues would scale similarly with inflationary effects, leaving a similar profit margin %.

I think it’s more about expectation for growth being lower, not present cash flow.

Re: Twitch.tv Lays of 400 Employees

#14

Post by gretch »

runnerup wrote: post #6
mdavidn wrote: post #5

Earlier quoted context omitted.

The "macroeconomic environment" is the evaporation of available VC funding because higher interest rates provide more lucrative investments elsewhere.

Why would Amazon (owner of twitch) care about that? They have tons of cash and revenues are still quite strong. AMZN isn’t looking for VC funding, they are the whale. Net income is hard to judge — yes it’s down but not only is Amazon famous for reinvesting all profits and claiming $0 of net earnings, but they’ve also been writing off a lot of one time charges for severances related to these layoffs.

Because their income comes from advertising. Because the economy sucks in general, companies in all industries are being more careful with where they spend their marketing budget.

You can see this reflected in the revenue of other advertising companies as well such as google and meta.

Re: Twitch.tv Lays of 400 Employees

#17

Post by kneebonian »

runnerup wrote: post #9
vkou wrote: post #4

Earlier quoted context omitted.

The macroeconomic trend is 'the stock price went down because the fed stopped printing money'.

I don’t understand how this is affecting AMZN’s cash flow though. Seems like both their costs and revenues would scale similarly with inflationary effects, leaving a similar profit margin %.

Once you realize that sometime in the past 10-20 years the economy started having nothing to do with actual goods and services and instead turned into some sort of weird game played by the powerful and the rich it makes more sense.

Personally I peg it happening sometime around 2008 when it became clear the rules didn't matter, consequences were for the poor and party hearty. Explain how else a company like Uber that was losing money on every ride was able to raise billions in VC funding.

Think of it like that and it makes more sense.

Re: Twitch.tv Lays of 400 Employees

#19

Post by Aperocky »

gretch wrote: post #11
gtirloni wrote: post #3

> Like many companies, our business has been impacted by the current macroeconomic environment I must be living under a rock because, outside big tech self-inflicted wounds, I don't know what they are talking about. Is it Ukraine? SVB? Chinese housing market?

Federal reserve interest rates. When interest rates are low, money flows more freely. When interests rates are up, it's harder to lend/borrow, money flows less freely, and the economy cinches up as a whole. This is a major simplification to a very complex system, but it happens because e.g. as someone with money, you'd rather just put it into a government bond that will for sure pay you 4%, rather than chasing specul…

Not just your money, renting money is so much cheaper when you only need to pay 0.25% per year against the firehose known as the Fed.

Re: Twitch.tv Lays of 400 Employees

#20

Post by sanderjd »

gtirloni wrote: post #3

> Like many companies, our business has been impacted by the current macroeconomic environment I must be living under a rock because, outside big tech self-inflicted wounds, I don't know what they are talking about. Is it Ukraine? SVB? Chinese housing market?

I don't know for sure, but it seems to me that advertising spend must be way down, due to interest rates and (related) the expectation that consumer spending will / should be pulling back over the next X months. All the biggest layoffs seem downstream from consumer spending in some way or another.
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