WaPo lays off 54 people at publishing tech arm Arc XP
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The Washington Post on Monday laid off 54 people across its publishing tech arm, Arc XP, Axios has learned.
Why it matters: Despite growing its customer base consistently over the past decade, Arc XP is still losing money.
Zoom in: Fifty-four jobs are being cut across the organization in functions such as sales, engineering, marketing, technology, product, etc., a spokesperson confirmed to Axios. Arc XP employed approximately 300 people before the cuts.
- Arc XP President Matt Monahan informed employees Monday of his decision to make the cuts in an effort to build a more sustainable business.
- "This decision will help us align to a plan for the future that is both ambitious and achievable," he wrote, while adding that the cuts are being accompanied by a "sharpened product vision designed to meet the challenges emerging for them today."
Catch up quick: Arc XP, then called "Arc," was launched in 2015 with the backing of owner Jeff Bezos.
- The goal was to create a software arm that could drive a new revenue stream for The Post as the newspaper entered the digital era.
- The Post tried to expand Arc XP's functionality to meet the broader array of web publishers during the pandemic as more businesses were coming online, but eventually refocused its efforts on service mostly media firms. It rebranded to Arc XP in 2021 amid that temporary pivot.
- The Post has explored selling Arc XP, which would give the company cash to infuse into its newsroom and news products, but a sale never came to fruition.
Between the lines: Most of Arc XP's 2,500+ customers are media publishers, many of which are local and national news publishers outside of the U.S.
- The company hopes to streamline its product vision for the next decade by investing in more AI-powered tools for its customers.
- Arc XP's revenue strategy relies on human consultation to help onboard and train its clients. In the future, the company hopes to improve those efforts with automation and technology.
The big picture: The layoffs come as The Post pushes to streamline its operations to become more efficient amid a tumultuous advertising climate.
- The company avoided layoffs by offering more than 200 voluntary buyouts to employees last year.
- The Post's CEO Will Lewis, who started in January, said in May that the company lost $77 million in the past year. Total revenues, he added, had declined 12% since 2021.
Reality check: Many media companies have tried to build software arms, only to realize that they require heavy investments up front that eat at profits.
- While software businesses tied to recurring revenues tend to yield higher valuations, the market for deals has softened amid high interest rates, making them less attractive to some media businesses.
