San Francisco-based crowdfunding/membership platform Patreon is letting go of 80 of its staff, representing 17% of the company’s workforce, as the firm becomes the latest company in a string of tech industry-related layoffs.
The news comes just over a year after Patreon raised $155 million in its series F funding round, boosting its valuation to $4 billion.
Jack Conte, CEO and co-founder of Patreon, made the announcement in a blog post on Tuesday (September 13), despite previously telling the company’s staff that layoffs would be a last resort for the company.
“Over the last 9 months, we’ve seen the tech industry – and the whole economy – change considerably,” Conte said.
“Many of you have asked me about layoffs at All Hands meetings as we’ve set out to tighten our focus, and I’ve said that layoffs would be a last resort. Today we are taking that step, and I am deeply sorry to the kind, talented, creator-first people who will be leaving Patreon,” the executive added.
The move will affect at least four departments at Patreon including Go-to-Market, Operations, Finance, and People. The decision came just a week after the company also let go of five employees from its security organization, which Conte said “stemmed from a different set of reasons.”
“The change last week was part of a longer-term strategy to continue distributing security responsibilities across our entire engineering team, bring new areas of expertise into Patreon internally, and continue partnering with external experts,” Conte said as he dismissed concerns that the company is cutting its security investment, stressing that Patreon is in fact boosting its funding in security.
“As difficult as this is for our team, I know this is the right thing to do for Patreon.”
Patreon’s restructuring will also result in the shutdown of the company’s offices in Dublin and Berlin. The company has offered its nine engineers in Dublin to relocate to the US as the firm plans to consolidate its engineering team in the US.
The company’s decision to shut down its Berlin offices, where it operates a Sales and Marketing team, comes as Patreon decided to cut its spending on that division to shift its resources toward its core product. Patreon will instead consolidate its marketing efforts to its US teams, which will support multiple regions.
Affected employees in the US will be given three months severance plus an additional two weeks for each half year of their tenure beyond the first year. They will also be eligible for a COBRA health care coverage through the end of the year.
Patreon is also offering packages to its affected members in Europe including three months of pay and an additional two weeks per half-year of service beyond the first year, as well as three months of health care coverage.
Conte posed a challenge to its remaining employees, saying “the second Renaissance has already begun, and we have a massive opportunity ahead of us to change the course of history for creative people.”
Patreon generates income from taking a percentage of the subscriptions that fans pay to creators. With Patreon, content creators are able to run their own subscription service, allowing them to earn a monthly income from subscribers.
“Our focus is sharpened, but our mission is unchanged: we will help build a world in which creative people are cherished, respected, and powerful.”
Conte said the company will continue to give creators an avenue to build direct relationships with their communities.
“Our focus is sharpened, but our mission is unchanged: we will help build a world in which creative people are cherished, respected, and powerful, with tools and infrastructure to help them realize the potential of their imagination,” the executive said.
Conte also wrote on his personal Instagram page about the decision, saying: “As difficult as this is for our team, I know this is the right thing to do for Patreon, because it ensures that the company maintains a position of strength, even through an economic downturn, while continuing to deliver for our creators.”
More than 250,000 creators including video creators, podcasters, musicians, writers and gamers are on Patreon’s platform.Music Business Worldwide