January 6, 2017

After a year of tremendous growth, digital publisher Medium is cutting a third of its staff

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But does it scale?

Ev Williams, co-founder of Blogger and Twitter, announced on Wednesday that his most recent venture, Medium, will be laying off fifty employees—almost a third of its total workforce—and shuttering offices in New York and Washington, D.C. This news comes after a banner year for the quickly growing company. According to Williams’s announcement, readership and content creation grew almost 300% and several high profile digital publications—The Ringer, The Awl and ThinkProgress—moved their content management to the platform.

So why did fifty working people have to lose their jobs? As usual, the answer is: ad revenues. But, if we are to believe Mr. Williams, the problem is not necessarily a lack of ad revenue, but a fear of reduced future ad revenue, a rejection of the kind of industry that depends on the largess of lazy corporate marketing teams. As he puts it:

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. And it is measured, amplified, and rewarded based on its ability to do that. Period. As a result, we get… well, what we get. And it’s getting worse.

Difficult to argue with!

According to Williams, most of the layoffs were in “sales, support, and other business functions,” and included some executive positions, which were created to develop their sales and marketing teams. While the expanded sales and marketing effort had succeeded in driving growth at the company, they had not been able to answer “the big question of driving payment for quality content.” Partly, then, the move is meant to cut costs as the company directs resources towards managing and adapting to that 300% spike in growth, though Williams insists that it will also allow them to shift “resources and attention to defining a new model for writers and creators to be rewarded, based on the value they’re creating for people.”

At face value, all of this sounds good. Ad revenue is bad, because it makes you dependent on corporate interests that don’t care about quality or accuracy, and it requires such massive quantities of clicks that only the largest of the large (Facebook and Google) are able to sustain themselves in the long run. Williams wants build a thing that doesn’t depend on ad revenue. So he fired a bunch of people to make that happen.

But of course that’s mostly spin. A simpler, and probably more honest explanation, given by someone “close to the company,” was cited in a Recode article: “Medium simply grew too quickly… and laying off 50 people is part of Medium’s plan to cut costs while it figures out what comes next.” Which is a) refreshingly free of aspirational, Bay-Area bullshit, and b) probably true. Not that we disagree that there are real problems with the incentive structures engendered by an ad-driven revenue stream. That’s not the question. The question is whether Medium is actually interested in “rewarding” writers for “their ability to enlighten and inform,” or whether they are interested in making shitloads of money and have realized that ad revenues don’t accomplish that goal.

So, with that in mind, let’s return to the question of those fifty unfortunate folks who lost their jobs. Williams would have us believe that these positions were liquidated in the search for a more egalitarian internet, free from the yoke of corporate ad revenue. This is a noble sacrifice, surely! And a canny PR move. Instead of thinking about the major and irrefutable economic blow that fell on the men and women who lost their jobs, we think about a group of writers in the near future, finally paid for all their hard work. But this latter group is largely imaginary, and the shape of their promised compensation largely contingent.

Williams offers scant detail on the business model that might power Medium’s ad-free future. And he gives no hint of how this speculative situation might be better for writers than the current regime. According to the aforementioned Recode article, Medium has raised $130 million from various, high-profile tech investors, and is currently valued at $600 million. So all we really know is that fifty people lost their jobs so that a cabal of rich white dudes can have some flexibility as they relentlessly march us into a meaninglessly improved (but ad-free!) future.

 

 

Simon Reichley is the rights and operations manager at Melville House.

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