Here’s another sign that it’s hard out there for digital publishers: People Inc., the former Dotdash Meredith, announced Thursday it is laying off 226 employees.
Altogether, People Inc. is cutting about 6% of its headcount. The cuts will impact all areas of the company’s business.
People Inc. denied that the layoffs indicate that its business is struggling. As a counterpoint, the company pointed to its acquisition of food creator network Feedfeed last week as a sign it’s focused on growth.
Rather, the layoffs reflect a strategic decision on People Inc.’s part to free up money to invest in growth areas, according to CEO Neil Vogel’s memo to employees announcing the layoffs, which the company shared with AdExchanger.
“Today’s actions are a difficult but necessary step as we continue to evolve our business and prioritize investments that will help us continue to thrive in today’s media environment,” Vogel wrote.
That strategy includes investing in creator partnerships, with the Feedfeed acquisition an early indicator of People’s diversification beyond traditional digital publishing.
“Feedfeed brings us new capabilities, skillsets and reach in the social food space and can serve as a blueprint for other categories,” a company spokesperson told AdExchanger.
People said it will also continue investing in its contextual ad-targeting tech, D/Cipher+, a proprietary tool that was also made available to third-party publishers in February.
On People Inc. parent company IAC’s Q2 earnings call in August, Vogel said D/Cipher+ wasn’t yet material to its revenue mix, though he added it would be a “material contributor” by 2026.
Asked whether the layoffs indicate some growing pains for D/Cipher+, the company spokesperson said that “D/Cipher+ is proving to be the growth driver we envisioned. It’s our fastest growing business unit, as measured by both headcount and revenue.” They added, “We are particularly excited about the adoption of D/Cipher+ across the CTV ecosystem and the recently introduced ability to transact via PMPs.”
However, any time a company cuts headcount, questions inevitably turn to the health of the underlying business.
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While People Inc is cutting 226 roles, it has hired 320 people over the past year “to help us drive growth in new areas,” according to Vogel’s memo, and the company currently has 40 open roles it’s looking to fill.
Still, People Inc. is being impacted by the same upheavals in search that are affecting every digital publisher.
Vogel has been open about People seeing reductions in search referral traffic as a result of zero-click AI search products. He specifically called out Google’s AI Overviews during IAC’s Q2 earnings call. In Q1, AI Overviews appeared on 33% of search keywords related to People’s content, but by Q2, that number had grown to 55%.
While People Inc. confirmed that search referrals have been a drag on its business, it downplayed Google’s relevance to its current business. “Today, less than a third of People Inc. sessions and about 18% of digital revenue come from Google search,” the company spokesperson said.
The spokesperson also pointed to recent wins in off-platform growth on non-owned and operated properties including Apple News, YouTube, Instagram and TikTok as offsetting some search traffic losses. “We’ve grown our off-platform views more than 50% in the last two years,” the spokesperson said.
And People has also been striking deals with AI search companies. It entered a content licensing partnership last year with ChatGPT maker OpenAI that recently started having a material impact on revenue. The deal boosted People’s licensing revenue by 23% YOY in Q2.
Speaking of AI, People Inc. told AdExchanger that it expects AI partnerships and AI-based ad targeting optimizations to remain a source of growth going forward.
However, People Inc. was adamant that this round of layoffs does not reflect an effort on its part to replace content creation roles with generative AI. “We embrace the benefits of AI, but AI will never create our content,” the People Inc. spokesperson said.
Some positive growth indicators aside, investors have been wary this year. IAC’s stock price dipped by about 13% following its Q2 earnings, as it missed its revenue projection for the quarter. IAC reported $586.9 million in total Q2 revenue, compared to its projection of $601.4 million.
IAC’s stock price is down by about 22% compared to October 2024. So clearly, investors have concerns.
But People Inc. is in the same boat as other publishers. Its digital ad revenue grew by 5% YOY in Q2, just slightly behind the IAB’s 5.7% US ad spend growth projection for 2025.
And the company is prioritizing new ways to reach audiences as the traditional digital publishing model continues to be threatened.
“We are aggressively investing in new ways to connect directly with our users, and directly with our advertisers and partners, including a number of high-profile projects that we have launched or are in the pipeline,” Vogel wrote in his memo. “We are as optimistic as ever, and we will continue to share our plans, including at our upcoming all-hands after third-quarter earnings are released.”
