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Twitch.tv Lays of 400 Employees

blog.twitch.tv

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Re: Twitch.tv Lays of 400 Employees

#41

Post by coredog64 »

mym1990 wrote: post #39
gretch wrote: post #11

Earlier quoted context omitted.

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…

If this is the case, why are layoffs currently mostly in the tech sector and not everywhere? Unemployment budged .2% from Jan - Feb but this is hardly indicative of anything.

The tech sector is doubly impacted. First, a lot of these ZIRP jobs are in technology as that’s where the returns are. Second, there’s another class of tech jobs that are themselves dependent on tech companies (Cloud providers, managed SaaS products, etc.)

Re: Twitch.tv Lays of 400 Employees

#42

Post by yieldcrv »

mym1990 wrote: post #39
gretch wrote: post #11

Earlier quoted context omitted.

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…

If this is the case, why are layoffs currently mostly in the tech sector and not everywhere? Unemployment budged .2% from Jan - Feb but this is hardly indicative of anything.

because tech was was the biggest beneficiary of monetary expansion, at least by percentage gains in a sector, and would have to be a close second in absolute dollar amounts if not first.

basically TINA principle: there is no alternative, which means that an infinite amount of money was created for a finite amount of assets, people that are paranoid about beating a couple months of high inflation didn’t know where to put the money

established industries with clear revenue trends already had stretched and unattractive valuations

real estate already went to unconscionable price levels

government bonds at record prices and lowest yields, in Europe people would accept negative interest rates literally willing to pay the government instead of investing in unproven businesses

but between the unproven entrepreneur there was still lots of big tech that was the recipient of cheap money and high valuations.

now people are rebalancing. new money isn't being created and existing money is purchasing treasuries at 5%

Re: Twitch.tv Lays of 400 Employees

#44

Post by vuln »

this_user wrote: post #32
kneebonian wrote: post #17

Earlier quoted context omitted.

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…

All of that is a direct consequence of low interest rates. If money is cheap and easy to borrow, there is less pressure on a business like Uber to turn an actual profit. Instead, investors will encourage them to grow aggressively in the hopes of capturing the market. Once liquidity dries up, there will be more pressure to actually make money. But the economy is working as intended and it's actors are merely reacting…

> Once liquidity dries up, there will be more pressure to actually make money.

No. They IPO and the investors get their money while retail investors hold the bag of poop thinking they just got _in_ on something.

Re: Twitch.tv Lays of 400 Employees

#45

Post by coredog64 »

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.

Amazon needs to provide attractive returns to shareholders just like a unicorn. If you $AMZN is not up 5% YoY, then sell it and park it in a 6 month T-bill or I series bond. And as holder of $AMZN, I can tell you that they are definitely not up 5% YoY, let alone the 15% that they generally try to get to.

Re: Twitch.tv Lays of 400 Employees

#46

Post by rossdavidh »

mym1990 wrote: post #39
gretch wrote: post #11

Earlier quoted context omitted.

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…

If this is the case, why are layoffs currently mostly in the tech sector and not everywhere? Unemployment budged .2% from Jan - Feb but this is hardly indicative of anything.

1) more excessive hiring during 2020-2021-early 2022 in tech than in most sectors 2) some sectors such as domestic manufacturing are ramping up capacity, thus need more people than they expected to, whereas tech companies that thought pandemic-induced changes would stick need fewer people than they expected to 3) lots of excess liquidity went to investors who liked to invest in tech, hoping to get the next FB/Apple/etc., thus it is more of a change for them when that stops happening 4) let's face it more bogus business ideas in the last 10 years were tech than anything else; when interest rates go up is when they face a reality check

Re: Twitch.tv Lays of 400 Employees

#47

Post by [deleted] »

gretch wrote: post #33
aaomidi wrote: post #30

Earlier quoted context omitted.

https://www.macrotrends.net/stocks/charts/GOOG/alphabet/reve... https://www.macrotrends.net/stocks/charts/META/meta-platform... Is it?

uh yeah it literally is? click into your own links? Google has their 3rd worst quarter for YoY Quarterly growth out of the last 12 years. Facebook has 3 consecutive quarters of negative yoy growth

[deleted]

Re: Twitch.tv Lays of 400 Employees

#48

Post by rossdavidh »

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.

The owner of Amazon was the prime beneficiary of VC funding to tech companies, because oftentimes a large chunk of that went for AWS. In that gold rush, Amazon was the one selling shovels.

The gold rush is now over, for a while at least, so Amazon is probably seeing a lot of their big AWS customers cutting back, or in some cases disappearing. Essentially, AWS is in the same position as SVBank. If your money comes from lots of tech startups that don't want to have their own infrastructure, and didn't used to need to worry about cutting costs, but now they do, then you can see big "outflows" (except unlike SVB it's more decreasing revenue).

Re: Twitch.tv Lays of 400 Employees

#49

Post by gretch »

mym1990 wrote: post #39
gretch wrote: post #11

Earlier quoted context omitted.

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…

If this is the case, why are layoffs currently mostly in the tech sector and not everywhere? Unemployment budged .2% from Jan - Feb but this is hardly indicative of anything.

Because tech ballooned the most during the covid reaction.

e.g. META has roughly doubled in headcount since 2020. Now it is laying off a fraction of that new headcount.

I'm sure there's a similar stat for Amazon/Twitch.

And think about how much stuff people were buying on Amazon when everything was closed. Think about how many hours of twitch were watched when it was illegal to do anything else.

You can't look at e.g. Walmart and say "hey they doubled in 2 years". Thus, no lay offs needed

Re: Twitch.tv Lays of 400 Employees

#50

Post by dathinab »

maerF0x0 wrote: post #38

Twitch is an amazon property. This is likely simply an extension of the amazon layoffs.

unlikely as AFIK Amazone hasn't fully folded Twitch into it's structures additionally:

Firstly Twitch due to historic reason is less likely to have any personal bloat.

Secondly running a streaming platform isn't cheap (media live cross decoding, high data transfer, more requirements for the data transfer due to less buffering, still moderation and copyright detection, some licenses with big copyright holders etc.) and from why I have heard twitch isn't doing that well (through not terrible).

Thirdly there was a influx of live streaming usage during COVID which now likely is receding.

Fourthly it relies a lot on people not just subscribing but "gifting" money (bits, subs) to streamers for little return besides bragging rights, a thanks maybe some emotes and feeling good because of the gift. In a economy which feels more unstable people are less likely to want to spend money this way, or can't even if they want to.

I would guess Twitch has more reasons for cost cutting then Amazone, but at the same time I would guess in different to Amazone Twitch is more likely to be negatively affected by the layoffs.

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