Reddit is joining a growing list of tech companies contracting due to the bumpy economy, telling workers it plans to lay off 5% of employees and scale back new hiring.
The moves, reported by multiple media outlets, were conveyed in an internal memo from CEO Steve Huffman. The privately held, San Francisco-based company is understood to have about 2,000 employees.
“The team and I reviewed and adjusted our plan through the end of 2024,” the exec wrote. “We’ve had a solid first half of the year and this restructuring will position us to carry that momentum into the second half and beyond.”
The company’s goal is to reach break-even next year and being able to finance more resources for moderators on the platform, Huffman explained. Third-party app developers are also expected to see steeper fee demands from Reddit as it looks to leverage the scale it has attained since launching in 2005.
Reddit had filed for an initial public offering in 2021 after its message boards became valuable platforms for individual investors and meme-stock traders. Economic conditions soured toward the end of that year, preventing the offering from proceeding.
Across the tech sector, more than 100,000 jobs have been eliminated over the past year, at emerging firms all the way to giants like Amazon and Google. In announcing significant cuts at Facebook parent Meta Platforms, co-founder and CEO Mark Zuckerberg declared 2023 to be the “year of efficiency.”
The Wall Street Journal had the first report of the Reddit cuts.