Matt Sanchez, co-founder and CEO of Say Media (which owns xoJane, ReadWrite, and Dogster), just told me that the company has laid off about 10 percent of its 400-person staff.
Sanchez described this as part of Say’s transformation from an ad network to “a digital media company.” The company isn’t getting out of the ad network business completely, but he said that part of Say is relatively mature and that the company’s focus should be on the content side. The layoffs, Sanchez said, were really about looking “at all parts of the business except for sales and our content organization” and bringing them in line with that vision.
As for why the layoffs are happening now, he said there’s more pressure on digital media companies to become profitable. For example, he pointed to TechCrunch-owner Aol’s recent earnings report (the company is still facing a lot of questions about whether its content business can ever be a moneymaker, and CEO Tim Armstrong tried to allay those concerns by saying that Patch will be profitable in the fourth quarter).
Sanchez told me that with the layoffs, Say should be profitable in the second half of 2013. Looking ahead, he said he plans to stay focused on the content verticals that Say has already established (style, tech, and living), but that doesn’t preclude launching or acquiring new sites in the future — he just wants to do that using the company’s profits, rather than raising more venture capital.
“Regardless of whether it’s an IPO, an acquisition, whatever you think about our long-term prospects from an exit perspective, nothing’s changed,” Sanchez said. “We want to build an enduring media company. … We just think the best way to get there is to get profitable and grow from strength.”
Here’s the memo that Sanchez sent to Say staff:
Sayers,
This morning we had to say goodbye to some really talented Say Media employees and it was tough. It’s been a difficult day for all of us, and I know that many of you are feeling the absence of our colleagues and friends. We did not make these decisions lightly; each person that left today has contributed to our mission and will be missed.
Two and a half years ago, we set out on a course to build the media company of the future. We knew it wouldn’t be easy, and along the way the media landscape has continued to shift. We’ve navigated from ad network to media company while the transactional display market has commoditized on exchanges as predicted. We’ve invested heavily in this transformation, and are coming out the other side with a solid foundation for the future.
We have built out a world-class publishing platform, transformed our sales team, evolved our offering to content-led marketing programs and filled out our brand portfolio with talent and brands we are all very proud of. Our focus on Point-of-View content is working. Our brands are deeply engaging, growing communities of readers. The publishing platform on which these brands sit boasts a pipeline of new products that are poised to change the media landscape. And our advertising solutions are impressive and working hard for our marketing partners.
That said, the time is right for us to transition aggressively to continued growth with profitability. To that end, we’ve made a set of hard decisions aimed at right-sizing our business with a greater focus on supporting our strong content brands, growing sales and building innovative publishing and advertising products — while at the same time achieving profitability in the second half of this year.
Each and every one of you is incredibly important to what we are building at Say. Your passion, intelligence, energy and loyalty are what make this company and our culture so special. Today’s actions were painful but necessary for us to move forward, and I am confident we are on the right path to creating the media company of the future.
We’ll get together tomorrow for an All Hands, and I’ll share more detail about this action and our plans for the year. As always, please reach out to me if you have any questions.
Thanks,
Matt