Video-sharing platform Vimeo has laid off 6 percent of its workforce amid challenging market conditions and uncertainty about the economy.
New York-based Vimeo’s CEO Anjali Sud announced the layoffs, which she said came after careful consideration, in a blog post on July 18.
“Our people are what makes Vimeo great, and losing any of them is a personal failure that I feel deeply. But after assessing the challenging market conditions and uncertainty ahead, I believe this is the responsible action to take,” said Sud. “It is the right thing to do, but still a painful outcome that impacts the jobs and lives of people we care about and have worked with side-by-side.”
“We are making this decision in order to ensure we come out of this economic downturn a stronger company,” she added.
Sud had previously told staff at Vimeo that she would do everything she could to avoid layoffs but a challenging economic market and soaring inflation have left a string of companies having to make worker cutbacks in recent months.
As of the end of 2021, Vimeo had a total of 1,219 full-time employees, according to the company’s latest annual report (pdf).
However, the company has joined a string of other businesses in slowing down hiring in recent months as recession fears weigh heavily, including Substack, Twitter Inc., Meta Platforms Inc., Netflix Inc., Tesla Inc., and Uber Technologies Inc.
In Monday’s blog post, Sud noted that the company has “cash in the bank and a supportive board that trusts us to operate smartly and with agility,” but that business executives have “spent a lot of time looking at scenarios for how to best position Vimeo with the appropriate amount of financial flexibility during this period.”
‘Challenging Economic Conditions’
It has also been shifting investments and expenses in light of current volatility in the economy, said Sud.
Vimeo reported 1.7 million paying subscribers in its first quarter results published in May (pdf), and year-over-year subscriber growth of 6 percent.
The company said it expects a 2022 adjusted EBITDA loss of $25 million to $30 million and a GAAP operating loss of $93.2 million to $98.2 million, while noting it was still working through the impact of a return to normalization following the COVID-19 pandemic.
But despite this, the CEO said that the “reality is that the challenging economic conditions around us have impacted our business” and that Vimeo “must assume that these conditions will remain challenged for the foreseeable future and that we aren’t immune.”
“So while we’ve intentionally taken action across other expense areas first, it’s become clear that we also have to look at our largest area of investment, our team.”
The job cuts were focused on a “small number of structural areas” of the business, she added.
Each departing Vimeo employee will receive a minimum of 12 weeks’ pay plus additional time depending on tenure; an extended timeframe to exercise their equity; COBRA health coverage for medical, dental, and vision in the United States; mental well-being support and job transition support, including professional outplacement services; and a new alumni community called #Alumneo, according to Sud.
“We have incredible people leaving Vimeo who we want to make sure are set up for success in finding their next job opportunity,” Sud continued. “Our leadership team and I will use our networks and relationships to help do that.”
Many economists now believe that the United States is heading for a recession in the near future, with analysts at Wells Fargo forecasting that an economic downturn could happen by the end of 2022 or the start of 2023.