Mashable’s deal to sell to publisher Ziff Davis for $50 million — one-fifth of its prior valuation of $250 million — was reported last month by the Wall Street Journal. The exit for Mashable came after it sought additional funding to keep the doors open.
On Tuesday, New York-based Mashable closed the Ziff Davis deal, which is owned by tech-services company j2 Global, and with the sale has laid off 50 employees, according to reports by Recode and the New York Post. It’s unclear how many total employees Mashable has.
Mashable told employees it was laying off 30% of the company’s workforce, according to a source familiar with the cuts. That suggests it had a headcount of around 170.
Reps for Mashable, Ziff Davis and j2 did not respond to requests for comment Tuesday.
Pete Cashmore, Mashable’s founder, as well as editor-in-chief Jessica Coen are staying on at the company under Ziff Davis’ ownership, according to the Post report.
“We think Mashable punched above its weight in developing an audience, now they have to figure out how to monetize,” Ziff Davis COO Steve Horowitz said in an interview with the Post. “It’s a really great time for Mashable to get back to the core of what it was — a tech and social site.”
Cashmore announced the layoffs in a memo to staff Tuesday. “It is never easy to see colleagues and friends depart the company. While such decisions are difficult and painful, I can assure you they were made only after very careful consideration and based on what we firmly believe will provide Mashable with a strategy and structure that will drive a successful, sustainable and profitable future,” he wrote in the memo, as reported by Recode.
Several Mashable staffers tweeted about getting laid off from the company on Tuesday:
Investors in Mashable included Time Warner’s Turner, which led a $15 million round of funding last year, as well as Time Warner Investments, Updata Partners, David Jones and Mike Lazerow, and R&R Venture Partners, a fund created by Dick Parsons and Ronald Lauder.
Cashmore started Mashable as a blog in 2005 when he was a teen in Scotland. In the last two years it has seen an exodus of top execs including chief strategy officer Adam Ostrow, who departed for TV broadcaster Tegna, and chief revenue officer Ed Wise (now CRO of Romeo Power). Mashable laid off about 30 employees last year after the Series C funding, including longtime editor-in-chief Jim Roberts and previous CRO Seth Rogin.
In 2016, Mashable posted a net loss of $10 million as revenue rose 36% to $42 million, according to the Wall Street Journal. The company had been projecting $50 million in revenue for 2017 and appeared to be on track for a sizable loss, per the Journal.
For the third quarter of 2017, Ziff Davis (reported as the digital media group of j2) generated revenue of $127.8 million and an adjusted operating profit of $34.7 million.
Ziff Davis’s properties include IGN, PCMag, AskMen, Speedtest, ExtremeTech, and Everyday Health. The New York-based publisher was acquired in 2012 by j2, whose business cloud services group offers services like internet fax, virtual phone, and email marketing.
Last year, Ziff Davis unsuccessfully bid on the assets of Gawker Media in a bankruptcy proceeding. ZD’s $90 million offer was beat out by Univision Communications, which bought six Gawker sites (excluding Gawker.com) for $135 million.