14 DAY TRIAL // Digg's new CEO Matt Williams certainly doesn't have the easiest job in the world. Coming in just as Digg was dealing with a pretty much failed revamp, his job seems to be cleaning up the mess he didn't make. One of the first big moves since taking over the company is laying off 25 employees, or about 37 percent of staff.
"The fact is our business has a burn rate that is too high. We must significantly cut our expenses to achieve profitability in 2011," Williams said in an email to employees published on the Digg blog.
"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," he said.
"It’s been an incredibly tough decision. I wish it weren’t necessary. However, I know it’s the right choice for Digg’s future success as a business," he explained.
Williams says the move is necessary to bring the company to profitability. The company, which was founded in 2004, has never been in need of investor money and so has never been profitable.
Revenue for 2010 is said to be around $15 million, but the company is spending more than that.
The layoffs are just part of Digg's new strategy, the new CEO says. The company will focus more on the product and on innovating, hoping to bring Digg back into shape.
Digg was the prominent web 2.0 company a rising star that never really lived up to its potential. With Twitter and other real-time social tools replacing it as a news source, Digg has been trying to reinvent itself.
A major revamp was supposed to mark a fresh start for Digg, but it was received very, very poorly by many of its users. Digg promised to fix many of the issues raised by the users, but it has its work cut out ahead of it.