SAN FRANCISCO — Medium, a publishing platform started by one of Twitter’s co-founders, said Wednesday that it’s laying off 50 employees, or one-third of its workforce, as it eyes changes to a business model that relies heavily on ad dollars.
“We believe people who write and share ideas should be rewarded on their ability to enlighten and inform, not simply their ability to attract a few seconds of attention,” Medium founder and CEO Ev Williams wrote in a post about the layoffs.
Williams said the tech firm will cut jobs mostly in sales, support and other business functions. It’s also shutting down offices in New York and Washington, D.C., but some employees will continue to work remotely there.
The tech firm has tried to attract more publishers to post content on its site and started selling ad products so they could make money. Websites such as The Awl, Pacific Standard, Electric Literature and other independent publishers started using Medium.
But Williams noted that relying on ad dollars like traditional media companies comes with a lot of risks. He didn’t say though how much money Medium makes from advertising.
“To continue on this trajectory put us at risk — even if we were successful, business-wise — of becoming an extension of a broken system. Upon further reflection, it’s clear that the broken system is ad-driven media on the internet,” he said.
As social media sites fuel the rise of shorter stories, photos and videos, Medium has bet that readers will spend the time to read longer narratives.
The 44-year-old CEO said the tech firm is working on a new model by which writers and creators get paid based on the value of the content they’re creating for readers. It’s too soon to say what this new model will look like, he wrote.
But some experts say it could be wishful thinking on the company’s part. Outside of subscription fees, ads and donations, media companies have struggled to find the right business model.
Meanwhile, social media firms such as Facebook and LinkedIn also give people the ability to publish blogs.
In 2015, five technology and social media companies made up 65 percent of revenue from digital advertising. Google, Facebook, Yahoo, Microsoft and Twitter accounted for $38.5 billion out of $59.6 billion spent on digital ads, according to the Pew Research Center.
“I applaud the sentiment. It sounds like a great idea. It’s definitely swimming against the tide,” said Roger Kay, president of Endpoint Technologies Associates, an independent technology market intelligence company.
Medium has 60 million unique monthly visitors. The company is valued at $600 million, according to news reports.
