Digital publishing platform Medium announced yesterday it is cutting its workforce by roughly one third, founder and CEO Ev Williams revealed in a blog post published on the site. Williams said the layoffs, affecting around 50 staffers, were prompted by slower than expected growth in online advertising revenues.
The layoffs essentially spell the end of Medium’s branded content business, “Promoted Stories,” which was intended to generate ad revenues by helping big advertising clients create engaging multimedia content on the platform.
This model was meant to overcome the limitations and shortcomings of the broader digital ad business, which Williams criticized: “Upon further reflection, it’s clear that the broken system is ad-driven media on the internet. It simply doesn’t serve people. In fact, it’s not designed to. The vast majority of articles, videos, and other ‘content’ we all consume on a daily basis is paid for – directly or indirectly – by corporations who are funding it in order to advance their goals.”
By contrast, he notes "people who write and share ideas should be rewarded on their ability to enlighten and inform, not simply their ability to attract a few seconds of attention.”
Again, it’s unclear quite how Medium intends to square the circle: one obvious alternative, offering digital subscriptions are allowing consumers to pay directly for content in other ways, presents its own formidable challenges.
The platform already offers publishers the option of “memberships” for readers, but it’s unclear how much revenue this has generated in comparison to the now-defunct Promoted Stories.
The layoffs will fall mostly on jobs in ad sales, support and other business functions, as part of a wider push to re-position the company and implement a new business model.
Specifically, Medium will seek to reduce its dependence on digital ads in favor of a new monetization system – which remains undefined. “It is too soon to say exactly what this will look like,” Williams said.