Reddit lays off 5% of its workforce, reduces hiring

US-based social media company Reddit revealed its plans to lay off nearly 5% of its workforce, and reduce its hiring for the rest of 2023 from 300 to around 100.

As reported by The Wall Street Journal, Reddit co-founder and CEO Steve Huffman sent an email to staff on Tuesday informing them about the layoff, which is expected to impact 90 employees.

Per report, the company is reducing its workforce and trimming its hiring plans in an effort to address key priorities, such as funding projects and reaching its target of breaking even in 2024.

“We’ve had a solid first half of the year, and this restructuring will position us to carry that momentum into the second half and beyond,” Huffman wrote in the email.

With its latest move, Reddit is joining many other tech companies like Microsoft, Google’s parent Alphabet, Meta, LinkedIn, and Electronic Arts that announced layoffs this year citing the global economic downturn.

While Reddit generates most of its revenue from advertising, it said last month that it would soon start charging third-party developers for access to its API. Following the news, many third-party Reddit clients expressed their disappointment, saying the change would put their business at risk. Christian Selig, developer of the popular Reddit app Apollo, said that the change would cost them $20 million per year.

Also Read: Reddit Revenue and Usage Statistics

In late 2021, the social media company confidentially filed paperwork for an initial public offering, but its plans didn’t go as planned due to economic reasons. However, sources familiar with the matter told The Information this February that Reddit is aiming to go public later this year, probably in the second half.