Digg, a popular news ranking website, is running into financial problems once again. Less than six months after laying off 10% of their workforce, they are now giving pink slips to another 37% of their employees; which amounts to 25 employees based on CNET’s report.
In an email from Williams, Digg's CEO, the company must continue to slash expenses in order to achieve profitability:
“Unfortunately, to reach our goals, we have to take some difficult steps. The fact is our business has a burn rate that is too high. We must significantly cut our expenses to achieve profitability in 2011. We’ve considered all of the possible options for reduction, from salaries to fixed costs. The result is that, in addition to lowering many of our operational costs, I’ve made the decision to downsize our staff from 67 to 42 people.”
The company has recently experienced a major shakeup in their executive team, with former Amazon executive Matt Williams taking over as CEO and current CRO Chas Edwards resigning to work for start-up Pixazza. Digg is also attempting to “refocus” their product to be a more mainstream site. In order to try getting there they have recently released “version 4” of the site, but it has been met with many bugs and issues.
In 2006, Digg was one of the top-25 most frequented websites and turned down offers of over $100 million in order to remain independent. Since then the company has floundered, facing competition from companies like Reddit.com (owned by Wired Digital). While they have good employees, it appears that the company has been mismanaged for many years and this will be another attempt to try and right the ship.