Say Media Lays Off 10 Percent Of Staff, Aims For Profitability In Second Half Of 2013

Posted: May 10, 2013 in GT, Media

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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

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