Six weeks after becoming Digg’s CEO, Matt Williams has made a tough call. Williams announced today that he intends to lay off 37 percent of the organization’s employees in an effort to keep Digg out of the red.
On the Digg About blog, Williams explained, "The fact is our business has a burn rate that is too high. We must significantly cut our expenses to achieve profitability in 2011. 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."
This is a scary sign for Digg (and Digg fans), as that’s a big cut and almost bound to have a significant effect on something. It’s unlikely that 25 employees held the title "pencil sharpener," after all.
One important note is that everyone affected by the move should have some help getting another job, though. Williams pledged, "I’m personally committed to help find new opportunities for everyone affected by the transition. Digg’s Board members have also offered to help find placements within their portfolio companies."
And losing 37 percent of its employees should allow Digg to save quite a lot of money, so it’s perhaps not time to order a virtual tombstone for the company just yet.
Williams wrote, "Let’s please use today to show our sincere appreciation for our friends and colleagues who will be moving on. Tomorrow, we’ll go forward with a new strategy for Digg."