Less than six months after raising $50m in a Series D venture capital round, US-based sports journalism outlet The Athletic is laying off nearly 8 per cent of its staff and imposing other cost-cutting measures.
The staff cuts, amounting to 46 people and cutting across both editorial and business operations, will be joined by wage cuts of at least 10 per cent for most employees, and progressively higher reductions for those earning in excess of $150,000 per year.
While consumer interest in the subscription-based The Athletic continues to grow, subscriber development had slowed by 20 to 30 per cent in recent months with the dearth of live competition because of the ongoing Covid-19 pandemic. The company’s business model, almost entirely dependent on subscriptions, veers from many other consumer outlets that have advertising-based models.
The Athletic has raised nearly $140m in venture capital funds to date, with the latest round in January valuing the company at nearly $500m. The four-year-old company had originally forecasted to turn a profit in 2020. In recent years, The Athletic had also been an aggressive hiring spree, in many cases picking up veteran sportswriting talent hurt by the marked retreat of the US newspaper industry.
“With sports on pause due to the ongoing pandemic, we made the difficult decision to reduce the size of our staff in select coverage areas,” The Athletic said in a statement. “While we are hopeful that sports will soon resume, this measure was necessary to ensure the company can weather the uncertainty that lies ahead. Overall, our subscriber base remains steady and we are proud of our newsroom’s continuing coverage of the return of sports.”
A wide range of other consumer news outlets in the US, including the TheMaven-controlled Sports Illustrated, have made in recent months similar cutbacks in either staff headcount, compensation, or both.