In an effort to restructure and address its priorities, Reddit, the social media company, is laying off around 90 employees and slowing down its hiring process. The aim is to allocate resources towards funding projects and achieving profitability by next year. The job cuts account for approximately 5% of Reddit’s total workforce of 2,000 employees.
According to an email sent by CEO Steve Huffman, the company has experienced a successful first half of the year, and this restructuring will help sustain that momentum going forward. As part of the restructuring, Reddit plans to reduce its hiring plans for the remainder of the year from an initial target of 300 new hires to approximately 100.
Founded in 2005, Reddit is renowned for its subreddit message boards covering various topics and its popular “ask me anything” sessions with celebrities, politicians, and experts. The company was initially acquired by Condé Nast in 2006, but later spun off by parent company Advance Publications in 2011. Steve Huffman took over as CEO in 2015.
Although Reddit had filed for an initial public offering (IPO) at the end of 2021, it has not proceeded with those plans yet, potentially due to declining tech stock valuations. The company primarily generates revenue from advertising but recently announced changes to its terms of service, including charging select third-party developers for access to its application programming interface (API).
Reddit gained significant attention in early 2021 when its WallStreetBets subreddit became a hub for individual investors rallying around meme stocks like GameStop. This event resulted in an influx of new users and advertisers for the platform, as mentioned by Huffman in an interview with The Wall Street Journal.
Several other technology companies, including Amazon, Meta Platforms (formerly Facebook), Alphabet (parent company of Google), and Microsoft, have also downsized their workforces over the past year, citing factors such as inflation and rising interest rates. Additionally, companies across various industries, such as McDonald’s, Walt Disney, Accenture, McKinsey, and Hasbro, have recently announced layoffs.