On Tuesday, Reddit announced it will lay off approximately 5 percent of its workforce, equating to around 90 employees. This decision aligns the company with a growing trend among technology firms across the United States that have been implementing job cuts in response to economic pressures.
Various tech giants, including Meta Platforms, have been reducing their staff after expanding aggressively during the pandemic. The industry is now bracing for potential economic challenges.
Last month, Meta, the parent company of Facebook, cut jobs across its business and operations sectors as part of the final phase of a three-part layoff plan initially revealed in March, which aimed to eliminate 10,000 positions.
Reddit, which separated from the magazine conglomerate Conde Nast in 2011, has recently enjoyed increased popularity, particularly due to forums like WallStreetBets that have attracted retail investors eager to speculate on stock movements.
The Wall Street Journal first broke the news of Reddit’s layoffs on Tuesday, referencing an internal email sent by CEO Steve Huffman.
In the email, Huffman indicated that the company would also scale back its hiring plans for the remainder of the year, aiming to bring on about 100 new employees instead of the previously anticipated 300.
In December 2021, Reddit confidentially filed for an initial public offering with the U.S. Securities and Exchange Commission, spurred by its platforms becoming popular among day traders during a surge in meme stocks.
At that time, the company was reportedly exploring a valuation exceeding $15 billion, as noted by Reuters in September 2021. Earlier that same year, it had been valued at $10 billion during a private funding round.
Additionally, Reddit sought assistance from Wall Street banking institutions such as Morgan Stanley and Goldman Sachs for its upcoming IPO.
Founded in 2005 by Steve Huffman and Alexis Ohanian, Reddit boasts over 50 million daily active users and hosts more than 100,000 communities.
© Thomson Reuters 2023
