The bad news drumbeat for digital media companies continues. The female-focused media company Refinery29 informed its employees today it was cutting 40 jobs, or about 10% of its workforce, ahead of an expected miss on its 2018 revenue target. In a letter to employees, the founders said the layoffs were mostly affecting the product, engineering and video divisions and are designed to help prepare the publisher to be a “next gen” company. The memo also outlined that it was focusing on creating videos that have lasting value and not a short-shelf life (ie Facebook video).
Despite the miss, Refinery29 remains one of the digital media publishers with the largest business—it did $130 million in revenue last year. But it’s also saddled with a $500 million valuation. While most media executives and investors expect there to be a big roll-up in the digital media space, a company like Refinery29 is still too expensive for most buyers. Its price will likely have to come down; as layoffs like this suggest, that could be happening sooner rather than later.