Substack lays off 13 employees, roughly 14% of company

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Substack is laying off 13 people, around 14% of the company, according to a note sent to employees Wednesday by the company’s co-founder and CEO Chris Best obtained by Axios.

Why it matters: The company is trying to reach profitability without having to rely on fundraising amid a weak economy.

“Our goal is to make Substack robust even in the toughest market conditions, and to set the company up for long-term success without relying on raising money — or, at least, doing so only on our time and our terms,” Best wrote in the message, which he also posted on Twitter.

Details: The layoffs, which cover roughly 13 of Substack’s 94 employees, were across human resources, support and operations, the company’s vice president of communications Lulu Cheng Meservey confirmed.

Catch up quick: Substack paused fundraising efforts earlier this year as the markets began to cool off.

It was looking to raise $75- $100 million in a series C round at a roughly $1 billion valuation before the launch economy began to take a turn for the worse, The New York Times reported.
Executives determined the company would be better suited not to need to rely on fundraising at all, either for stability or growth.
”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. By refocusing our team and financial planning, we can fund our investments from our growing business while remaining a reliable partner for the writers who are building their own businesses on our platform,” Best noted in the employee memo.

Between the lines: Despite the layoffs, Substack continues to roll out new products and features, and Cheng Meservey said the company still has money in the bank to continue fueling growth.

The company says it will continue to hire, but more slowly. It plans to focus in key areas of growth, like engineering and product.

What they’re saying: “Substack remains in a strong position. We continue to grow, we have a business model that works, and we have money in the bank. But the way we play to win in 2022 and beyond is different from the way we were playing in 2021,” Best wrote.

The big picture: Dozens of tech and media companies have implemented layoffs and other cost-cutting measures in recent weeks. Startups have been hit particularly hard, given how weak the financing market is during periods of economic tumult.

Editor’s note: This story has been updated with a link to Best’s tweet.