Patreon is laying off 20% of its staff. Read the memo its CEO sent to employees.
· Business Insider
SXSW/Getty Images
Visit newsbetting.bond for more information.
- Patreon, a subscription platform, is laying off about 20% of its staff, according to the company.
- CEO Jack Conte said it needs to cut costs and flatten its org to remain "dependable" for creators.
- Read the memo Patreon sent to its staff about the layoffs and restructuring.
Patreon, a platform for creators that paywalls their content, is laying off staff.
In a publicly shared note addressed to Patreon's content creators, CEO Jack Conte announced that the creator-economy startup is laying off 93 employees, about 20% of its staff.
Conte said in the memo to staffers that the "market in which we operate has undergone profound change over the last 6 months," and that the company needs to cut costs to "remain a stable, dependable rock for our creators."
And yes, AI does play a role in it, Conte said.
"AI has fundamentally transformed the tech industry, the pace of change has never been more intense, and I expect it to get even faster," Conte said in the memo.
However, Patreon emphasized that these layoffs were not because the company thinks AI can replace humans or creativity.
In March, Conte told Business Insider that while AI can help people create "beautiful things," companies shouldn't roll out AI tools "in a way that just creates a bloodbath for the world's creative people."
Conte also published a video about the topic, recommending that AI companies start paying creators.
Patreon's ethos as a company is based on paying creators. Founded in 2013, it's become a popular platform for creators — like YouTubers and podcasters — to have fans pay for content and community.
The company became a unicorn in 2020 as the creator economy picked up steam, and was valued at $4 billion in 2021. Like much of the broader tech and media industries, Patreon has weathered financial headwinds since. In September 2022, the company laid off 80 people, about 17% of its staff at the time.
Patreon has faced many new competitors in the space, like Substack, Beehiiv, YouTube's own membership tiers, and white-label apps made by creators.
It's not the only company in the creator economy cutting staff. In February, creator-commerce platform LTK cut staff, and other tech companies, including Meta, Snapchat, and LinkedIn, have also laid off workers this year.
Following this recent round of layoffs, Conte said in the memo to staffers that the company would make changes to its "organizational structure and how we work." Namely, by "flattening" the company's teams.
The company will continue to focus on its products for creators.
"Patreon's core business is healthy and strong, and we're going to be a rock for creators for decades to come," Conte said in the post shared with creators. "We're not changing our roadmap or priorities. Patreon will continue shipping new features, improvements to our core experiences, media and community products, and more."
Read the full memo Patreon sent to its staff:
Hi Team,I have a painful update this morning. I have decided to reduce the size of our team by 20%, or 93 people. All teammates at the company will receive an email within the next few minutes indicating whether or not your role is impacted by this change.I'll get into the reasons for this decision and logistics for the day below, but before I do, I want to acknowledge how painful this will be for the kind, ambitious, hard working, and mission-driven humans who make up this company. The people at Patreon are the core of our spirit and what makes our culture and business so special. Today will be hard for so many people, and as the person responsible for this decision and the decisions leading up to this, I don't take that lightly. Please take the time you need today to support our departing teammates and yourself.What's changing and whyThere are two key changes we are making today:I'll explain each below.1. The workforce reductionNothing about our core business has changed — it remains strong and consistent:
- A workforce reduction
- Changing our organizational structure and how we work
On top of that, our transformation to becoming a media and community network is starting to work:
- More than 300,000 creators in nearly every country in the world are earning money on our platform.
- Creators are earning billions of dollars each year on Patreon, and those earnings have continued to exhibit steady, strong growth.
- Creators, members, revenue, and processing volume continue to show strong, consistent growth every month.
But our transformation is going to take time. We are setting our sights on massive problems: the attention economy is optimizing for addiction instead of long term relationships. Creators are finding it increasingly difficult to reach their followers and build strong communities. The legacy social platforms are locking creators into their systems instead of giving them independence. There is no company better positioned than Patreon to tackle these problems.At the same time, the market in which we operate has undergone profound change over the last 6 months. We need to adjust our cost structure to ensure that we remain a stable, dependable rock for our creators as we work toward our long term ambition. The changes we're making today are painful, but they're necessary to ensure that Patreon can take the time we need to address the above problems from a position of strength.2. Changing our organizational structure and how we workWe're making a number of changes to our organizational structure and how we work. Specifically, we're flattening the organization, refocusing teams on our top priorities, and evolving key aspects of our operations to make us faster at adapting to change.We're making those changes because with a smaller team, we need a new organizational structure to continue executing effectively on our strategy and priorities, which are not changing. We remain focused on:
- Our network is now sending 1.5M new members to creators every month.
- Creators have added ~200M free memberships over the past 3 years.
- Feed-attributed memberships are up more than 5X since our network launch.
In addition, I want us to have increased agility as a company. AI has fundamentally transformed the tech industry, the pace of change has never been more intense, and I expect it to get even faster. Each of us will play a role in redefining how we work together as the nature of our work continues to change over time.AI is not a replacement for human creativityOne of the most discussed questions over the last few months has been whether AI is replacing humans.To be clear about the impact of AI on today's decision: we are not making the above changes because we believe AI replaces humans.The more we have learned to use these new tools, the clearer it has become that they are not substitutes for the creativity, judgment, detail orientation, or craftsmanship that our teammates have in spades, nor do they replace the desire for human connection that all of us cherish so deeply. That's my personal opinion, but more importantly, it's the foundation of Patreon's strategy: our product vision and business are both predicated on the value of human creativity and human connection.AI has fundamentally transformed the tech industry, though, including how we work, how we build products, how we communicate, and more. That does have an impact on how we operate and organize.Logistics for TodayTo our teammates leaving:In the email you receive from our People team, you'll find details about next steps, severance packages, and information about how to connect with a member of the People team if you have any questions. You'll also receive a separate message from a member of our senior leadership team inviting you to a personal call if you would like.You'll have access to your Patreon laptop and Slack through 5PM PT today. Access to all other internal systems will be removed, because we want to ensure we protect our creators and their businesses.I know how important it is for folks to be able to say goodbye, so we've created a #gratitude-and-farewell Slack channel as a place for all of us to connect, if you feel comfortable.Severance details:We've prepared a severance package to support impacted employees through this transition:
- Improving core creator and fan experiences on the platform, and
- Helping creators grow their audiences and businesses through our network
Thank you for everything you've given our creators, fans, and this company. Your contributions have made a massive difference in the lives of so many people, and I'm deeply grateful for the energy, craft, and care you've put into your work. That work is now a part of Patreon and will continue to benefit creators and their communities for years to come.To our teammates remaining:The focus for today will be on our departing teammates, but we've scheduled a short video call for those of us remaining to be together as a team. Tomorrow, we'll have an all hands and Q&A to review the details of the reorganization and changes to how we work. Next week, we'll get together in person as planned to dive deeper on our H2 plans.For over a decade, Patreon has been growing and evolving to ensure that creators are properly compensated for the value they create in the world. We have successfully adapted and thrived through recessions, the chaos of online media, and multiple market shifts. We continue to come out the other side stronger than before, and that's exactly what we'll do again.
- 16 weeks of pay starting from today, including remaining on payroll through our August 20th vesting date.
- One additional week of pay for every full year worked at the company.
- Additional cash payment to accommodate a) recent hires who haven't reached their 1-year cliff, and b) more-tenured teammates who haven't yet received their 2026 refresh grant.
- Healthcare coverage through the end of the year for eligible employees and families.
- A $1,500 stipend to replace your company laptop.
Have a tip? You can also contact her via encrypted messaging app Signal (@sydneykbradley.123), encrypted email ([email protected]), or standard email ([email protected]). Use a personal email address, a nonwork WiFi network, and a nonwork device; here's our guide to sharing information securely.
Read the original article on Business Insider