Patreon lays off 20% of workforce amid tech industry restructuring wave

Patreon is laying off 20% of its workforce, affecting about 93 employees, as the creator platform restructures amid changing market conditions and a broader wave of workforce adjustments across the technology industry.

CEO Jack Conte disclosed the decision in a memo to employees on Thursday, saying the company would also overhaul its organisational structure by flattening management layers and refocusing teams.

The move comes despite the company reporting continued growth across its business, with more than 300,000 creators earning income on the platform and creator earnings, revenue and payment volumes continuing to rise.

What Patreon is saying

Conte said the layoffs were not driven by weaknesses in the company’s core business but by the need to align its cost structure with long-term strategic goals.

• “The market in which we operate has undergone profound change over the last six months. We need to adjust our cost structure to ensure that we remain a stable, dependable rock for our creators as we work toward our long-term ambition,” Conte said.

Conte also addressed the role of artificial intelligence in the restructuring, dismissing suggestions that the layoffs were intended to replace employees with AI.

• “We are not making the above changes because we believe AI replaces humans,” he said.

According to the CEO, the company has found that AI cannot replace the creativity, judgement, craftsmanship and human connection that underpin Patreon’s business model.

However, he acknowledged that the technology is reshaping how companies operate, develop products and organise their workforce.

• “AI has fundamentally transformed the tech industry, though, including how we work, how we build products, how we communicate, and more. That does have an impact on how we operate and organize,” he added.

More insights

Alongside the workforce reduction, Patreon said it is restructuring its organisation by reducing management layers, concentrating resources on its highest-priority initiatives and changing how teams operate to respond more quickly to industry changes.

• Employees affected by the layoffs will receive severance packages that include 16 weeks of pay, additional compensation based on years of service, healthcare coverage through the end of the year for eligible employees and a stipend to replace company-issued laptops.
• Patreon’s announcement also comes as technology companies continue to reassess their cost structures and organisational models in response to rapid advances in artificial intelligence.

Patreon became a unicorn in 2020 as the creator economy gained momentum and was valued at about $4 billion in 2021. However, like many technology and media companies, it has faced financial pressures in recent years.

In September 2022, the company laid off about 80 employees, representing roughly 17% of its workforce at the time, as it sought to reduce costs amid a tougher funding environment.

What you should know

Patreon’s decision comes as technology companies continue to restructure their workforces amid changing market conditions, cost pressures and the rapid adoption of artificial intelligence.

• Earlier this month, Nairametrics reported that Amazon has reduced its workforce within its artificial general intelligence (AGI) division, marking the latest round of job cuts as the company reallocates resources towards key artificial intelligence projects.

The layoffs affect teams within Amazon’s AGI organisation, although the company did not disclose the total number of employees impacted.

The move follows a wider restructuring programme at the e-commerce and cloud computing giant, which cut 16,000 jobs across various departments in January.