Digital Media

Second round of mass layoffs hits Diply, CEO says company wasn’t profitable

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For the second time in two months, mass layoffs have hit the offices of Diply, the London, Ont.-based viral content publisher that was once the toast of Canada’s startup scene.

CEO Taylor Ablitt told employees Tuesday that 35 staff would be laid off across the company’s London, Toronto and New York offices. He also acknowledged that the company was not profitable.

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“The digital publishing space is changing at a rapid pace and we will continue to adapt to remain a category leader,” wrote Ablitt in a memo to staff. “By taking these actions and reducing our expenses we will get back to profitability, a core pillar to our business from the very beginning.”

In July, Diply laid off 40 people, leaving little over 100 staff at the time. The company, which is incorporated as GoViral Inc., now has about half as many employees as it did in September 2016, when it employed 150.

Diply’s web traffic—a core indicator of its ability to make its punchy listicles and content spread across the internet—has fallen by half this year from 32.6 million visits in January to 15.8 million in August, according to web research firm SimilarWeb.

The traffic decline is largely the result of changes to Facebook’s News Feed algorithm, announced in January, which privilege content from users’ friends and family over that from publishers. Diply relies heavily on traffic from Facebook, which accounted for 86 per cent of the company’s desktop social traffic from June to August, according to SimilarWeb.

Recognized for its ability to rack up social media shares with lighthearted content ranging from humour to food recipes, Diply earned industry accolades as recently as February, when it accepted a distinction for best media and entertainment company at the Canadian Innovation Awards. Less than a year ago, in November 2017, it was named the fastest growing company in Canada by Deloitte’s Technology Fast 50 program.

The memo from Ablitt, dated September 25, says company management committed in July to measure the impact of the earlier layoffs and subsequent restructuring by September.

An independent spokesperson working for Diply provided a copy of Ablitt’s memo, but the company did not otherwise reply to requests for comment.

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“We knew it would be a dynamic timeline as initiatives unfolded week by week, and that the impact of these initiatives wouldn’t hit until mid September,” he wrote. “With the data now available, we once again need to adapt our strategy. These choices are difficult because they affect our people, but they allow us to deliver on our financial commitments going forward.”

Employees are being offered separation packages with strict non-disclosure agreements. One offer made to an employee laid off in Ontario and reviewed by The Logic says that if an employee does not agree to the package they will be paid only the minimum entitlements under the provincial Employment Standards Act.

Ablitt messaged all staff in Diply’s internal Slack channel after the layoffs were announced, calling it “a shitty day.”

In his memo, he said the company will move forward with a focus on four priorities: investment in programmatic advertising sales, diversifying its audience growth across social platforms, an increased focus on mobile video and an “expanded scope for content innovation and production.”