Online publishing firm Medium has revealed it is to lay-off 50 workers, equivalent to a third of its workforce, after CEO Ev Williams conceded that the companies business model wasn’t working.
The energetic start-up has secured more than $130m from investors such as Google Ventures but has thus far struggled to make money of its own by selling ads, prompting a radical change in tack from what Williams describes as a "broken system".
Outlining the cost cutting programme in a blog post Williams wrote: “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.”
Unfortunately for Medium, Williams has no clear alternative model as yet beyond a vague shift of resources to reward writers according to the ‘value they’re creating for people’.
Prior to this announcement Medium had been valued as highly as $600m.