Patreon said it laid off 80 employees, or about 17% of its workforce, with CEO Jack Conte citing an economic slowdown coming on the heels of a COVID-driven expansion by the creator-monetization company.
Conte announced the cutbacks in a memo to staff Tuesday. As part of the cost-cutting steps, Patreon is closing its offices in Berlin and Dublin and will reduce the size of its creator-partnerships operations “to take a more scaled approach with a smaller, consolidated team in the U.S.,” he wrote in the memo.
“Over the last 9 months, we’ve seen the tech industry — and the whole economy — change considerably,” Conte told employees.
In April 2021, Patreon said it raised $155 million in Series F funding, giving it a valuation of $4 billion.
The San Francisco-based company’s layoffs affected staffers in Patreon’s go-to-market, operations, finance and HR teams. In the memo, Conte said staff cuts were a “last resort” in its belt-tightening moves, “and I am deeply sorry to the kind, talented, creator-first people who will be leaving Patreon.”
The surge in business Patreon saw during COVID lockdowns led the company to build an operating plan “to support this outsized growth, but as the world began recovering from the pandemic and enduring a broader economic slowdown, that plan is no longer the right path forward for Patreon,” according to Conte.
Patreon will continue to increase its investments in product, engineering and design teams, as well as maintain its “commitment to outstanding service and support for creators,” Conte wrote. The company will cut back marketing, recruiting and other internal support functions, in addition to consolidating the creator-partnerships team.
Separately, Patreon last week laid off five employees in its security organization, which “stemmed from a different set of reasons from the ones guiding today’s decisions,” Conte said. Those cuts were “part of a longer-term strategy to continue distributing security responsibilities across our entire engineering team,” he said. “Unfortunately, the change generated concern that we were reducing our security investment, but I wanted to make it clear, especially in light of today’s changes, that we are in fact increasing our investment in security,” the CEO wrote.
According to Conte, Patreon employees laid off in the U.S. will receive three months severance plus an additional two weeks for each half-year of tenure beyond the first year, as well as COBRA health care coverage through the end of 2022. For staffers let go in Europe, “the intention of the packages” is to provide the same severance benefits but because of differing local laws “packages in different countries will vary in terms of how we pay for and cover these expenses,” the CEO wrote. Laid-off employees also are eligible for outplacement services.
“Our focus is sharpened, but our mission is unchanged: we will help build a world in which creative people are cherished, respected and powerful, with tools and infrastructure to help them realize the potential of their imagination,” Conte wrote in the memo, which Patreon posted online.
