Newsletter Startup Substack Cuts 14% Of Staff As Downturn Looms

(Bloomberg) -- Newsletter platform Substack Inc. cut 13 jobs on Wednesday, citing a gloomy economic outlook, the company’s chief executive officer said in an email to staff. 

The jobs represent 14% of the startup’s workforce, according to a company spokeswoman. Substack’s digital platform allows writers to publish free or paid newsletters, and the San Francisco-based startup collects a roughly 10% cut of the paid subscriptions. The job cuts were previously reported by the New York Times.

Substack CEO Chris Best said he and his two co-founders chose to eliminate the positions in order to make Substack less reliant on additional fundraising in the future, especially as a market downturn has sent technology stocks diving in recent months. Venture capital funding and deal volume have also dropped significantly in the past quarter, according to new data. 

“In recent weeks, the macroeconomic outlook has become increasingly uncertain, making it clear that we should be prepared for a period of challenging conditions that could last years,” Best wrote in the email.

Best also said he was “very sorry” for going back on his word to his employees. “Not so long ago, I told you all that our plan was to grow the team and not do layoffs,” he wrote. 

The company, which has attracted high-profile independent writers such as Matt Yglesias, has raised about $83 million since its founding in 2017, according the spokeswoman.

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