Following on from a successful 2016, publishing site Medium just dropped the bomb on its staff. The platform created by Twitter co-founder Evan Williams is axing 50 jobs (around one-third of its entire workforce) and shutting its offices in New York and Washington D.C.
The cuts will affect those in sales, support, and other business functions, claims Williams, with Medium retaining the “vast majority” of its product development and engineering teams.
“This is certainly one of the hardest things I’ve done in my years as a founder and CEO,” writes Williams.
The announcement comes as a bit of surprise seeing as just weeks ago Medium was touting the impressive year it had just witnessed. Publishing and visitor numbers were up across the board in 2016 — users shared 7.5 million posts (up from 1.9 million in 2015) and Medium saw its monthly visitors spike by 140 percent year-on-year to reach 60 million.
So, what went wrong? According to Williams, the layoffs are part of the company’s efforts to create a new business model. What that model will look like remains unclear. For now, Williams maintains that the current ad-driven media system is “broken.” Nonetheless, it was a path that Medium was content to go down despite its creator’s comments upon its launch in 2012 condemning the digital media landscape as “unsustainable and unsatisfying for producers and consumers alike.”
However, in its bid to court major commercial publishers, Medium realized it had to create ad products, which were introduced last year. As a result, it managed to attract some big names and buzzy publications including The Awl, The Ringer (Bill Simmons’ post-ESPN media venture), and an offshoot of Time Inc. property Fortune. Its main ad initiative was “promoted stories” — Medium’s ad unit (launched in beta last year) that dealt with sponsored posts. A person familiar with the matter told Digital Trends that its ad unit is one of the affected offerings impacted by Medium’s shifting model.
Instead, the person says Medium will concentrate on Memberships — a subscription system that allows publishers to charge for some or all of their content — and micro-payments as a “potential area for investment.”
In his announcement, Williams touts a vague new model that will “reward” writers and creators “based on the value they’re creating for people.” The company was unwilling to clarify exactly how it plans to do this. Perhaps, as Williams indicates, it is itself unsure of what the strategy will look like.
Venture capitalist and Medium investor M.G. Siegler posted his own response to Williams’ announcement. Referring to the solid numbers the platform witnessed last year, Siegler said that metrics can “deceive” and that simply slapping ads on the site was not a “sustainable” solution. “The goal is not actually to build the site with the most pageviews on the internet, but instead to fundamentally change the nature of publishing and reading,” said Siegler in his post.