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Twitch.tv Lays of 400 Employees

blog.twitch.tv

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Re: Twitch.tv Lays of 400 Employees

#91

Post by misssocrates »

ryandrake wrote: post #58

> 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. In order to run our business sustainably, we’ve made the very difficult decision to shrink the size of our workforce. Let's just take a moment to admire this paragraph. > "our business has been impacted by the current macroeconomic environment" There's th…

Why don't they just say what happened?

"We got drunk on cheap money"

Re: Twitch.tv Lays of 400 Employees

#92

Post by sokoloff »

pcurve wrote: post #71
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…

How does the fed rates impact game streaming revenue? Were they not profitable?

Same way Google and Facebook are hit by the reduction in advertising spend. Twitch is, from a business perspective, an advertising company. The streaming is a means to that end, just as search or social media is for Google and Facebook.

Re: Twitch.tv Lays of 400 Employees

#93

Post by pyuser583 »

tobyjsullivan wrote: post #51
mym1990 wrote: post #39

Earlier quoted context omitted.

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.

Is the commonality tech companies or high-growth companies? (Virtually all high-growth companies are tech companies but I don’t think the inverse is true - unless that’s how we define “tech” now which is plausible.) High-growth companies include both those that plan to grow fast and those that are growing fast. The general theory is nobody really knows how big such a company can grow. (eg, Amazon circa 2006 is domina…

A lot of tech companies have been pretending to be high growth startups, but are really utilities.

Re: Twitch.tv Lays of 400 Employees

#94

Post by karmasimida »

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 guess Twitch still hardly making any money

Re: Twitch.tv Lays of 400 Employees

#95

Post by andreimackenzie »

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?

Advertisers not spending as much

Re: Twitch.tv Lays of 400 Employees

#96

Post by tidepod12 »

hronic379 wrote: post #83
tidepod12 wrote: post #68

Earlier quoted context omitted.

Lots of false equivalence here. > What cash back do you get on your credit card? 2.625%? High yield savings account? Money market fund? 4.6%? None of these actions by me directly result in the loss of livelihood or uprooting of lives of other people. If you told me that by moving my money to a high yield savings account, it would result in my friends or family members losing their jobs, you bet your ass I wouldn't do…

> None of these actions by me directly result in the loss of livelihood or uprooting of lives of other people. By getting that shiny Chase sign up bonus, your are directly contributing to the firing of front line customer service workers. You think higher returns are pulled magically from thin air? Like capital gains on VTI/VOO/SPY?

> By getting that shiny Chase sign up bonus, your are directly contributing to the firing of front line customer service workers.

That's not what "directly" means.

Re: Twitch.tv Lays of 400 Employees

#97

Post by wolfgang000 »

ipsum2 wrote: post #28

The CEO and founder of Twitch announced a week ago that he was leaving the company. It's admirable to see a captain going down with his ship. https://news.ycombinator.com/item?id=35184011

What do you mean? he just appointed a new capitan while he deployed his lifeboat

Re: Twitch.tv Lays of 400 Employees

#98

Post by sokoloff »

BearOso wrote: post #88
calderknight wrote: post #59

Earlier quoted context omitted.

I think the companies have employees to try to make more money. When things are going really well in the economy it's easy for employees to create/capture lots of value, so the companies hire lots of employees to do that. But when the economy slows down a bit, suddenly it's a lot more difficult for employees to create value, so it doesn't make sense not to reduce the number of employees.

The problem here is increasing growth . That's unsustainable. Having growth is already a linear positive. Companies seek to continuously increase growth to placate shareholders, but that's a magnitude greater, quadratic. Eventually you simply can't keep increasing. In a panic to keep up the in short term, companies are cutting their lifelines. This is just leading to failure.

Or, so long as revenue growth is increasing (first and second derivative being positive), companies are inclined to pour on as much fuel on as they think they can productively use.

Once the second derivative turns negative, they are naturally much less interested in keeping the gas turned all the way up, so they trim back on spend.

Re: Twitch.tv Lays of 400 Employees

#99

Post by sberens »

ryandrake wrote: post #69
varunjain99 wrote: post #63

Earlier quoted context omitted.

Well, a company doesn't exist to just be profitable. But to maximize profits (mostly). So it's certainly possible that cutting costs - even when profitable - can increase short-term and long-term profitability.

So why didn't they do it a year ago? Or two years ago, or three? It would have increased profitability at that time, too. How did dozens of already-profitable companies all suddenly decide together to cut costs within 6 months of each other? I wish they would be more specific than the "macroeconomic environment" excuse. I swear these CEOs are like soccer players running around the pitch, just waiting for Mister Macro…

> It would have increased profitability at that time, too.

Not necessarily. The profit(headcount) function generally varies over time.

Re: Twitch.tv Lays of 400 Employees

#100

Post by fma »

rossdavidh wrote: post #48
runnerup wrote: post #6

Earlier quoted context omitted.

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 fro…

Why do you say "probably seeing a lot of their big AWS vueomters cutting back" when it can be verified.

AWS grew at 20% in Q4 2022. Grew less than forecasted but still not "disappearing".

https://www.cnbc.com/2023/02/02/amazon-aws-earnings-q4-2022....

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