Substack, a company that provides services for writers to offer paid newsletters, is laying off 13 people, around 14% of the company, according to a note sent to employees Wednesday by the company's co-founder and CEO Chris Best.
Substack Will Retrench 13 People
The company wants to be resilient even in the most challenging market situations and to position the business for long-term success without having to raise money, Best wrote in the message, which he also tweeted.
Today’s the saddest day we’ve had at Substack. We’re letting go of 13 people. Here’s the note I shared with the team. pic.twitter.com/0ycGtrIBh6
— Chris Best (@cjgbest) June 29, 2022
According to Axios, the layoffs, which affected about 13 of Substack's 94 employees, impacted the company's operations, support, and human resources departments. This was confirmed by Lulu Cheng Meservey, Substack's vice president of communications.
Variety mentioned that the company has more than 1 million paying newsletter subscribers.
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The Layoff Might Be Surprising for the Employees
Best claims, as per The Verge, that the company must alter its strategy since it may be dealing with "an extended period" where the economy deteriorates more. He claims that the company has taken a number of adjustments to ensure that it is in "a strong financial position," including the layoffs.
Best acknowledges that some employees may be surprised by the decision because, not long ago, he told them that the company plans to increase the team rather than perform layoffs. He added that the business has money saved and is still hiring for certain important roles. As the markets started to cool off earlier this year, Substack halted its fundraising efforts.
The Company Decided Not To Rely on Fundraising
According toThe New York Times, Substack was seeking to raise $75-100 million in a series C round at a valuation of about $1 billion before the launch economics started to deteriorate. Executives, however, came to the conclusion that the business would be better off not depending on fundraising at all, either for stability or growth.
Dozens of Tech Companies Have Implemented Layoffs Recently
In recent weeks, many tech companies have implemented cost-cutting initiatives, including layoffs. Given how fragile the finance industry is during times of economic crisis, startups have been struck particularly severely.
In our recent report, at its offices around the world, Unity Technologies let go of hundreds of employees. It was said that there were some (unreported) layoffs at least one month ago, and the company acknowledged undergoing recessions.
Some reports also said that the company's layoff has had an impact on practically every department, with the engineering and AI divisions feeling the brunt of it. Employees at Unity said that between 300 and 400 individuals had been laid off, and that layoffs were still ongoing.
In a separate report, the micromobility startup Bird also acknowledged recent layoffs, stating that everyone would be impacted, including new hires and top managers from various departments and geographic regions. Bird employs about 600 workers, thus it is likely that 138 of them will be retrenched.
Related Article: Unity is Laying Off Hundreds of Its Staff - But Why?
