Newsletter startup Substack on Wednesday said it was laying off 13 people out of roughly 90 employees in response to difficult economic conditions.
The company did not specify whether those employees being let go came from different departments or what their roles entailed. In a note to employees, CEO Chris Best cited prioritizing revenue growth during an “increasingly uncertain” economy. Best said in the note that Substack will hire at a slower pace as they prepare for challenging conditions that “could last years.”
“By refocusing our team and financial planning, we can fund our investments from our growing business while remaining a reliable partner for the writers who are building their own businesses on our platform,” Best wrote in a letter to employees. “Substack remains in a strong position. We continue to grow, we have a business model that works and we have money in the bank. But the way we play to win in 2022 and beyond is different from the way we were playing in 2021.”
Substack is by far seen as the biggest player in the newsletter space, generating revenue by taking a cut of writers’ subscription fees. The platform boasts some 12 million readers a month and reached one million paid subscriptions last year. It was seen as the dominant newsletter platform during the pandemic, luring everyone from freelance creators to legacy New York Times journalists.
The platform is home to high-profile writers including Andrew Sullivan, Bari Weiss, Matthew Yglesias, Glenn Greenwald, Matt Taibbi and Roxane Gay. Some of the top paid newsletters include Sinocism by Bill Bishop, with thousands of subscribers at $15 per month, and Popular Information by Judd Legum, with thousands paying $6 per month. The 4-year-old San Francisco–based company was valued at some $650 million last year.
Here is the full note from Best to employees:
I’m writing to let you know the sad news that we have let go 13 people from the team. After discussing with leaders in each area, Hamish, Jairaj, and I made this decision, and we’ve just come from meetings where we informed the affected people.
The people we are parting ways with are all smart, talented, and dedicated to their work and Substack’s mission. It has been a privilege to work alongside them and we’ll miss them.
I’m very sorry. Not so long ago, I told you all that our plan was to grow the team and not do layoffs. While we are still hiring for specific key roles, it’s at a slower pace and obviously our team has been pared down. We did not make this decision lightly. We’ve taken several measures to ensure Substack has a strong financial foundation, and saying goodbye to these teammates is by far the most difficult.
Our goal is to make Substack robust even in the toughest market conditions, and to set the company up for long-term success without relying on raising money – or, at least, doing so only on our time and our terms.
In recent weeks, the macroeconomic outlook has become increasingly uncertain, making it clear that we should be prepared for a period of challenging conditions that could last years. By refocusing our team and financial planning, we can fund our investments from our growing business while remaining a reliable partner for the writers who are building their own businesses on our platform.
Substack remains in a strong position. We continue to grow, we have a business model that works, and we have money in the bank. But the way we play to win in 2022 and beyond is different from the way we were playing in 2021.
We are extremely grateful to those who are departing the company, for their contributions and commitment. Their work has helped us get to where we are today, and they will always be part of the Substack story. I hope you’ll join me in thanking them for all they have done for Substack, and for building a better future for readers and writers.
During challenging times in the world, great writing matters more than ever, and so our mission to help writers do their best work is as urgent as ever. Thank you for being here. We have a lot of work to do.