×

Refinery29 Lays Off 10% of Staff as 2018 Revenue Comes Up Short

Digital media company Refinery29, facing a 5% revenue shortfall for the year, is cutting 10% of its workforce, or about 40 employees.

Company co-founders and co-CEOs Philippe von Borries and Justin Stefano announced the cuts in an internal memo. “While our 2018 revenue will show continued year-over-year growth, we are projecting to come in approximately 5% short of our goal,” they wrote. As a result of its financial pressures, “we will be parting ways with approximately 10% of our workforce.”

The latest cuts, first reported by the Wall Street Journal, come after New York-based Refinery29 laid off 34 employees in December 2017.

Refinery29, which targets a millennial female audience, is going to cut back on content “with a short shelf life,” according to the execs. “While this type of content has been driving views, it has not yielded a great monetization strategy to justify the same level of continued investment.” Von Borries and Stefano wrote that they see sustainable growth in “premium, evergreen” programming, and plan to produce more video (both short- and long-form) on that front.

In another effort to cut costs, R29 will “simplify and standardize” its technology operations. “[P]arts of our technology, specifically our back-end content management system, no longer need to be built from scratch and third-party offerings can serve our needs in a better and more cost-effective fashion,” the co-CEOs wrote.

Refinery29 also plans to create a single, unified sales group and a sales planning and operations group.

Founded in 2005, Refinery29 has raised $125 million in funding, including a $45 million round led by Turner in 2016. Other investors include WPP, Hearst, Discovery (through its acquisition of Scripps Networks Interactive), Stripes Group, Floodgate, Lead Edge Capital, First Round Capital and Lerer Ventures.

Read the full memo from von Borries and Stefano:

Dear R29’ers,

Today, we wanted to share several important announcements regarding the direction of our company, which involve us doubling down on our investment in key growth areas, as well as reducing resources in other areas of our business. This will require the very difficult decision to part ways with members of the R29 team.

As CEOs, it is our responsibility to all of you and the company that we make the necessary changes that will drive the business toward long-term success. This means having a rigorous focus on both our future growth and the bottom line of the company.

It’s important to note that the overall performance of the business this year has grown in a tough environment and that we have successfully diversified our revenue streams. This includes international, which will be up over 100%; our originals business, which has grown 50%; and our direct-to-consumer business, which includes our award-winning live events and will be up over 300%. We expect all of these to be significant drivers next year. While our 2018 revenue will show continued year-over-year growth, we are projecting to come in approximately 5% short of our goal.

We’ve identified areas within the business where we can better direct our resources toward our goal of building a next-gen media and entertainment company that powerfully connects with women around the world. While these changes will affect every division of the company, the areas where we will make the biggest shifts are in our video and product and engineering strategies.  

We are focusing on the production of premium, evergreen IP

Content is at the core of what we do. R29 is recognized as a leader in video — from Shatterbox to Shady. That said, the market is ever-changing, so we are putting further emphasis on where we see sustainable growth — and that is in premium IP. This means we will continue to produce more award-winning programming (both short and long-form) with less emphasis on the production of content with a short shelf life. While this type of content has been driving views, it has not yielded a great monetization strategy to justify the same level of continued investment.

We are simplifying and standardizing our technology

On the Product and Engineering side, we will simplify and standardize the technology we use to support best-in-class editorial workflows. As a company, we believe in supporting our own proprietary technology and product where we can gain competitive advantage. However, parts of our technology, specifically our back-end content management system, no longer need to be built from scratch and third-party offerings can serve our needs in a better and more cost-effective fashion. Going forward, we will re-orient tech and product resources toward differentiated data and front-end experiences that serve our audience in truly unique ways.

We are reorganizing our ad sales teams into one unified Customer Solutions Group

We have evaluated how our commercial team is organized and how we can work smarter and more proactively to deliver strong marketing solutions. This will involve key changes in the people, processes and products of our revenue teams, including the creation of a unified Customer Solutions Group and a Sales Planning and Operations Group.

All of this means that we will be parting ways with approximately 10% of our workforce. This decision was not taken lightly; it is hard but necessary for the company. Everyone at Refinery29 is an important part of our community, and we are proud of the work that each of you contributes. The people affected today are no exception, and we know they have bright futures.

To help ensure that happens, we will be working with departing staffers to provide support as they explore their next career move. We have an incredibly powerful alumni network, and we are working with our investors and partners to offer access to their resources and opportunities within their portfolio of companies.

There has never been a time when our content has been more relevant and necessary in shaping culture globally. You have all played, and will continue to play, a critical role in propelling that forward.

The strength of our brand, the creativity and innovation of this team, along with the commitment and love of our audience of hundreds of millions of women, will continue to cement our leading cultural position in the space.  

Please join us in expressing thanks to our impacted colleagues for their contributions and wishing them well.

Philippe & Justin

Popular on Variety

More Digital

  • T.J. Dillashaw, right, kicks Cody Garbrandt

    Disney Plans UFC Broadcast for FX

    UFC matches will return to FX  – but not on a permanent basis. ESPN has been showing preliminary bouts to UFC pay-per-view events for the last while on ESPN and ESPN2, and then showing the main card on its ESPN+ subscription video service. In September, the early lineup will air on FX, which the UFC [...]

  • fundo logo

    Google‘s Area 120 Is Testing Fundo, a Crowdfunding Service for Creators (EXCLUSIVE)

    Google’s skunkworks lab Area 120 has been quietly testing an events-centric crowdfunding service for YouTubers, Variety has learned. Called Fundo, the service allows creators to invite their fans to virtual meet & greet sessions and other paid online events. A Google spokesperson confirmed the testing in a statement provided to Variety: “One of the many [...]

  • Telling Lies - Logan Marshall-Green

    Sam Barlow's 'Telling Lies' Government-Surveillance Thriller Game Sets Release Date

    After more than two years in the works, “Telling Lies” — the investigative thriller from acclaimed game creator Sam Barlow — is ready to take the stage. The game, produced with and released by Annapurna Interactive, will be available next Friday, Aug. 23, via Steam and Apple’s Mac and iOS app stores. “Telling Lies” will [...]

  • YouTube logo

    YouTube Will Stop Letting Copyright Holders Seize Revenue via Manual Claims on Very Short Music Clips

    YouTube is pushing back against overzealous copyright policing by music companies. Starting in mid-September, the video giant will forbid copyright holders from making manual claims to commandeer revenue generated by YouTube videos that include very short music clips (e.g., five seconds of a song) or “unintentional” music (like music from passing cars). “One concerning trend [...]

  • Chelsea Handler memoir book buy online

    Chelsea Handler Bonds With Alexa in iHeartRadio Smart Speaker Promo

    iHeartRadio has teamed up with Amazon to promote Chelsea Handler’s podcast “Life Will Be The Death Of Me.” Beginning this Thursday, users of Amazon’s Echo smart speaker and other devices with Alexa built-in can opt to get their mornings started with Handler cracking jokes and exchanging banter with the smart assistant. Users simply have to [...]

  • David Messinger, Activision Blizzard

    Activision Blizzard Hires CAA Veteran David Messinger as CMO

    Activision Blizzard tapped David Messinger, a former 15-plus-year veteran of CAA, as its first corporate-wide chief marketing officer. Messinger, based in Santa Monica, reports to Coddy Johnson, Activision Blizzard’s president and COO. It’s the first time the video-game company has appointed a CMO who will oversee the global marketing operations across all of Activision Blizzard [...]

More From Our Brands

Access exclusive content