Pons_Aelius, 1 year ago

Part 1

Reddit could slim down management as moves toward an IPO

Thomas Maxwell

Reddit is preparing for an IPO amid controversy surrounding changes to its API.
Reddit employees say the company has a bloated leadership structure with too many managers.
Staffers were told earlier this year that they'd need to do "less but better."

As Reddit prepares for an initial public offering that could come by the end of 2023, it's looking to flatten its management structure, and employees say the company has become bloated with executive- and director-level employees.

Reddit filed for IPO in December 2021, when demand for new tech stocks was at a fever pitch. It said it surpassed $100 million in advertising revenue in the second quarter of 2021. It has also made large investments in artificial intelligence, acquiring the machine-learning startup Spell in June 2022 to help customize ad placements.

Since then, demand for tech stocks has dropped. Reddit laid off 90 employees in early June as it aims to reach profitability. Its revenue growth has slowed, The Information reported.

To prepare for the intense scrutiny of the public markets, Reddit is whipping itself into shape; managers told employees in product earlier this year that the goal was to do "less but better." Part of the mandate could include slimming down middle management.

Reddit is also examining areas of its business where it could squeeze costs. It recently announced a controversial decision to charge for access to its API, or application programming interface, which enables developers to build tools that connect to Reddit. It argued that it couldn't support third-party apps that use Reddit's content but don't provide any money in return.

Insider spoke with five current and former Reddit employees, who requested anonymity as they were not authorized to speak to the press or had signed nondisclosure agreements to receive severance. They described some leadership moves and road-map changes that caused what one employee described as "thrash."

The 18-year-old social-media company has long had a culture of "trying to do too many things and doing them really poorly and not finishing them at all," the same employee said. Internally, they said, the company would now focus on "having a simplified product plan and sticking to it."

A Reddit representative declined to comment on this story and pointed to a blog post about the company's acquisition of Spell.
A flattening at Reddit

Reddit executives presented a distribution of managers to direct reports during its last quarterly leadership summit in May in New York City. The distribution showed that many managers oversee four to six people. Managers who attended the summit told employees that leadership suggested the company would in the second half of the year consolidate teams with managers overseeing fewer than six employees, two employees said.