SmartNews, valued at $2 billion as of 2021, announced Thursday a 40% reduction in its U.S. and China workforce – around 120 people – during an All-Hands meeting attended by staff. The Tokyo-headquartered news aggregation website and app said the layoffs were due to “current economic conditions”, according to TechGround sources familiar with the company’s plans.
U.S. and Chinese engineering, product, and data science roles have been impacted; meanwhile in Japan SmartNews employees will soon experience a “voluntary departure program,” though with no specifics as of yet. Those laid-off are offered standard severance packages plus benefits; staff were informed they’d get an email within 15 minutes if affected by the layoffs.
SmartNews has 900 employees, including contract workers, a third of whom are based overseas.
Sources revealed to TechGround that the company closed its U.S. offices on Thursday and Friday without explanation, worrying employees before a virtual All Hands meeting.
“I’m sorry to see you go,” said Ken Suzuki, CEO of SmartNews.
Upon the announcement, the meeting concluded abruptly, leaving little opportunity for Q&A and displeasing some staff.
Established in Japan in 2012, the company arrived Stateside two years later and has since grown to cover thousands of U.S. cities as of early 2020. It boasts a network of over 3,000 global publishing partners whose content is available on its web and mobile platforms.
The app quickly rose to become a top news aggregator in its markets, using machine learning technology to personalize the reader’s experience by displaying only the most relevant articles. It also stood out in the U.S. with its “News From All Sides” feature, giving users access to news from across different political perspectives. During major events such as Covid-19 and elections, SmartNews provided an in-app dashboard offering vital updates at a glance.
The company has raised $400M since 2012, despite competition from Apple and Google. In their most recent Series F funding round, investors valued the business at “double unicorn” ($2B) and poured in $230M. New investors included Princeville Capital (U.S.), Woodline Partners, JIC Venture Growth Investments (Japan), Green Co-Invest Investment & Yamauchi-No.10 Family Office; existing backers ACA Investments & SMBC Venture Capital also participated.
SmartNews has reached 30 million monthly active users worldwide, with 20 million in Japan and 10 million in the U.S., though these numbers have been declining by 10-20%. Since 2014, it has garnered almost 81 million downloads from the App Store and Google Play; its largest markets are Japan (58%) and America (38%), as of 2022.
SmartNews was hit by the same economic headwinds that have caused many tech layoffs recently, as well as Apple’s ATT policy change. Launched in 2021, this new privacy measure hurt companies like Meta and Snap that depend on ad revenue while giving a boost to Apple Ads.
Leadership chose to pursue additional funding and a higher valuation in 2019, which has put the potential of going public at risk.
SmartNews confirmed the layoffs and offered, “We will continue to stay focused on our mission of helping people discover quality journalism.”
Unfortunately, the current economic climate has had an adverse effect on many businesses, including ours. To preserve the health of our company and ensure future growth, we sadly had to reorganize – a last resort decision that unfortunately impacted some of our remarkable employees. We hope that with the severance packages and career transition management services provided they will find new roles soon.