This will be a very challenging and sad week at Ezoic. We will be saying goodbye to many talented friends and colleagues as we are reducing the size of our team. In the U.S., if you are one of those impacted, you’ll receive an email to both your work and personal email in the next hours. To those of you who are leaving, I’m sincerely sorry that we must take this action and I take full responsibility for the decisions that have caused this.
The publishing ecosystem
This was a difficult decision, so I’d like to take a moment to discuss the realities of the world and our market today.
In retrospect, 2020 & 2021, apart from the initial covid shock, were a boom to the publishing an online advertising ecosystem. There was a massive shift towards online shopping, and everyone suddenly found themselves with way more time to spend on their devices. We saw massive growth in all areas of our business – sales hit records, ad rates were up, and our revenue in the first half of 2022 was up nearly 60% from the year prior.
Since that time, the world has changed again. Inflation has skyrocketed, interest rates have risen, crypto markets have crashed, and technology investment and spending have declined. As a result, ad rates are down nearly 35% from their peak. 2023 is much different than 2022 and the broader economic outlook is uncertain.
Broadly speaking, our business is well positioned to handle downturns and disruption like this. We provide a life-changing service to publishers and our value only increases during slower economic times. We are uniquely positioned in the market with just one major competitor. We are also extremely adaptable due to both our culture, technology-focused approach and our diverse publisher base.
We must strategically align our investments to the realities around us. We were investing in growth heavily and now our focus will be on investing in technology and services that will keep our publishers at the forefront of the industry and maximize the value they provide. It’s important to understand that this change doesn’t imply a reduction in our ambitions or potential. Instead, it signifies a new approach to growth, one that is more strategic. We aim to optimize our resources, foster sustainable growth, and above all, enhance our efficiency. This is about doing better with what we have, and making investments that will yield the most beneficial outcomes for our publishers and the success of our business.
How we are supporting those leaving
We increased the size of the team by 62% in 2022 and will be reducing our team by about 28% today. This reversal shows how wrong we got it. This difficult decision, decided by the board and me, is a result of my mistake of grossly over-hiring for the current world. I’m deeply regretful we couldn’t meet everyone’s expectations of what Ezoic would be for them.
Given the size of this action, there is no good way to deliver this news. Ultimately our goal is to let people know their status quickly and in the most respectful, considerate, and compassionate way possible. This is a significant change both for our Ezoic team members and the company. We recognize the difficulty of this and will not only treat each person with dignity but will provide transitional support.
We’ll be holding meetings with employees to discuss their positions. Recognizing the unsettling effect this has, we aim to inform everyone promptly. Details will be further shared with affected individuals. Those in the remaining positions will meet with their managers and team this afternoon or tomorrow in our UK offices.
Our commitment is to support everyone affected. We’ve prepared a transition package and are offering consultations with managers and People Ops.
- Severance Pay will be offered to all those affected, including a minimum additional 4 weeks of severance beyond what’s required as a base to our US employees. While the actual severance varies depending on tenure, no one in the US will receive less than a total of 6 weeks, even if they just started. Furthermore, since this situation is classified as a workforce reduction, additional government support will be available. We anticipate that the combined severance and government aid should provide a financial buffer for at least a couple of months for everyone affected.
- Medical Benefits will be available through the end of the month. Following, employees will have the option to continue the same coverage through COBRA.
- Modern Health provides coaching, therapy, and self-help options to employees and their households. This benefit will also be available through the month-end.
- Stock options. For those that would like to exercise their options, we will provide an extended period of 6 months for them to do so.
- Career support. Our People Operations team will be available to all of those leaving to provide support with finding new employment. They can help with resumes, search advice, references, recruiting services and more – just let us know how we can help.
- Immigration support. Support and assistance, including legal, with immigration-related matters will be available to those when appropriate.
Critically, we want everyone to know that we care about you and appreciate everything you’ve done for us and for Ezoic. While this wasn’t how we hoped things would go when we made hiring decisions, we are here to help you with your transition.
For those not directly impacted, the rest of this week is likely to be a little bumpy and maybe disorienting. It’s a lot of change, and I’d like to request that you help us take care of those that remain at Ezoic, those that have departed, and yourself. Please don’t hesitate to reach out to your lead or people operations if you’d like to talk.
To those companies in San Diego, London, Newcastle or remote that might be hiring, I’d like to stress that there are some truly magnificent and talented people available that are destined to do great things. Ezoic is filled with the highest quality people, and they would be amazing additions to nearly any company. Feel free to reach out directly to [email protected] and we will help connect you with some amazing people.
The Future
First, I’ll address the obvious – we made some big mistakes to get us here. Firstly, we did not adequately anticipate the prospect of a major ad rate and economic downturn. Secondly, we increased costs too quickly. Our incredible success in 2021 and early 2022 led us to invest heavily in our staff and in publishers pushing for growth, but we allowed costs to grow too quickly and inefficiencies to rise.
We are working to fix these mistakes. We will be returning to our roots of being a highly efficient and productive company. We will have a relentless focus on getting stuff done and reducing non-productive time spent. Our actions are proactive and strategic, not a response to a crisis. Financially we remain on solid footing, and we expect these changes to lead to robust cash flow generation in the quarters ahead.
These changes will have minimal impact on our company strategy. We will have to reduce some non-core focuses and be more stringent on our prioritization going forward. We will clarify what this means over the next couple of weeks.
Today is incredibly painful, but we’re still confident in Ezoic’s future. Every day more publishers than ever choose Ezoic as their partner and our reach is constantly growing. In fact, just last week, in the middle of summer, we set a record for the number of sessions on sites using Ezoic. In June alone, more than 4,000 publishers integrated with Ezoic, nearly double the same month last year. We continue to reach more than a billion people a month. In addition to all this in our core business, we have two best-of-breed cutting-edge products in Flickify for AI Video creation and Writio for AI Content creation. Humix continues to grow and be a game-changer for video publishers. Even after these changes, we will continue to be more than 200 strong, have the industry’s largest and most talented engineering and data science teams and we will remain the source of innovation for creators.
People join Ezoic because they appreciate our innovative culture and support our mission to empower content creators, regardless of size, location, social status, or language. We are one of the last bastions defending the original promise of the internet – that anyone, anywhere, can share their knowledge with the world and benefit from their hard work.
Today is a very sad day. We are saying goodbye to our extremely talented friends and colleagues, but we are also ready to continue our mission and ensure that Ezoic is well-positioned for success. I’d like everyone to take some time to focus on helping those leaving us and supporting the publishers that they were helping. Next week, we will refocus and continue our journey.
Dwayne Lafleur
