Over 23,000 tech professionals have already lost their jobs two weeks into 2023. The most recent is SmartNews, a news aggregation website, and app with its headquarters in Tokyo, Japan. SmartNews challenged Google and Apple’s long-standing dominance in this space, and is reducing its employees in China and the United States.
In order to maintain the health of our company and ensure future growth, we decided to conduct a reorganization that has impacted many of our incredible employees.SmartNews Spkoesperson
SmartNews has revealed that it’ll lay off 40% of its employees, or approximately 120 people, in China and the United States. According to the report, the recent layoff will affect Chinese and American staff, including those in data science, engineering, and product development.
The company announced the layoffs blaming the situation on the “current economic circumstances.”
The Mass Layoff at SmartNews
Most layoffs were from the development and engineering departments. However, a few editorial staff were also affected. According to a source familiar with the situation, a few contractor workers were also notified that their job was no longer required.
Given that SmartNews employs about 900 employees, the company’s layoffs will affect at least 360 employees.
While SmartNews employees in China and the United States were laid off, the company said its staff in Japan would shortly go through a “voluntary departure program,” though it didn’t give any further details.
Employees who are fired get standard severance compensation and perks. Employees were informed during the meeting that they’d get an email within 15-20 minutes if they were among those terminated.
The announcement comes nearly three months after the company introduced a US-focused advertising division that aims to increase the company’s presence in the North American market.
The abrupt shutdown of SmartNews’ offices in New York City, San Francisco, and Palo Alto for a couple of days was another event that preceded the layoffs, which several employees thought was strange until they realized that many roles were being terminated.
Companies Being Slammed by Macroeconomic Factors
Over 3,000 worldwide publishing partners collaborate with SmartNews, and their content is released publicly through its network on mobile devices and the web. News aggregators like SmartNews observed a steady rise in users throughout the global health crisis.
Even if SmartNews has enough cash for the current crisis, it may cut costs to ensure that those reserves last for some time.
With one-third of its followers from the United States, the SmartNews network currently connects active users to over 30 million across the countries it serves. However, a source claimed that those figures have declined by about 20% in both markets.
The drop occurs when media companies of all sizes cope with a considerable reduction in ad expenditure due to extensive economic instability, impacting profits for publishers relying heavily on advertisements to generate income.
Unfortunately, SmartNews was affected by the exact macroeconomic causes that recently resulted in many mass layoffs in the tech sector and issues that developed due to Apple’s introduction of ATT or App Tracking Transparency.
The iOS new privacy measure, implemented in 2021, affected companies with ad-based business models, such as Snap and Meta, while helping Apple’s ad revenue.
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Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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