Twitch layoffs: Amazon-owned company cuts hundreds of jobs

SAN FRANCISCO - San Francisco-based technology company Twitch announced it is laying off 35% of its staff, the company's CEO Dan Clancy announced.

In what Clancy called a "painful step to reduce headcount," the video game streaming giant announced Wednesday that it will lay off more than 500 people across the company. The CEO said Twitch paid more than $1 billion to streamers last year, and the organization can no longer sustain this many employees with such high operating costs.

The layoffs were first reported on Tuesday, but the numbers were not confirmed until the CEO's statement was released.

"So while the Twitch business remains strong, for some time now the organization has been sized based upon where we optimistically expect our business to be in 3 or more years, not where we’re at today. As with many other companies in the tech space, we are now sizing our organization based upon the current scale of our business and conservative predictions of how we expect to grow in the future," Clancy wrote in the statement.

Those who were affected by the tech layoffs received an email shortly after Clancy's note was posted to the Twitch blog. Those who will remain at the company are expected to receive a separate email shortly after.

"I also want to acknowledge how disappointed I was yesterday that this information leaked. I am sorry for all of the anxiety that it caused over the last several hours. Our hope was that you all would hear from us this morning and very quickly understand how this impacted your role and we were unfortunately not able to accelerate the timeline, which I know is very frustrating," Clancy said.

Twitch is a subsidiary of Amazon. It was purchased in 2014 for $970 million.