Toronto-based Wattpad has laid off 10 percent of its staff, or 15 people.
All departments were affected by the layoffs, including product and engineering, marketing, and HR. The company says its “strategic realignment” will balance the needs of its current business, while allowing it to focus on emerging technologies.
In a statement sent to BetaKit, CEO Allen Lau said that the move will allow the company to focus in four areas: emerging products, machine learning, data science, and Wattpad Studios. The company will hire in these areas over the coming months.
“Machine learning will help us become more efficient, as well as seize even more opportunities to spot hits-in-the-making.”
Lau first outlined this focus in a blog post in November 2016. At the time, Lau said the entertainment industry was challenged with finding its next big hits through the traditional focus-group approach, and that products like Snap Spectacles were creating new opportunities for entertainment. “As machine learning advances, we will be able to identify the next Harry Potter before anyone else and even help the story gain traction among the community,” Lau said.
In his statement to BetaKit, Lau said that Wattpad is “well on its way” to becoming a machine learning-first entertainment company. He said that when Wattpad launched 10 years ago just before the launch of the first iPhone, its key differentiators were mobile and social. Today, Lau says its key differentiator must be machine learning.
“Machine learning will help us become more efficient (i.e. community moderation), as well as seize even more opportunities to spot hits-in-the-making and co-produce stories with our partners in the traditional entertainment industry for other formats,” Lau said. “Just one year in, the Wattpad Studios model is proven, and we already have incredible traction with some leading brand partners. We need to double down on this.”
Lau also pointed to the success of its new Tap by Wattpad offering as an example of why they need to invest in emerging platforms. “People still love to connect through stories, but we need to package up stories in new and interesting ways — like video and VR — to keep people coming back. We recently announced a video partnership with Mashable, and have others interesting partnerships announcements on deck.”
The company, which has 55 million users on the platform every month, has been vocal about its mission to be a multi-platform entertainment company. In April 2016, the company launched Wattpad Studios with the specific goal of partnering with the entertainment industry to co-produce Wattpad stories for film and television. Since then, the company has announced partnerships with companies like Turner, NBC Universal, Paramount Pictures, and Simon & Schuster.
The company also works with brands through its Brand Solutions, and has encouraged its own writers to write for companies like General Electric, H&M, and Coca-Cola.
To help with the transition, Wattpad is sharing the names of those affected by the layoffs with their investor portfolio companies. “With the thriving startup community we have in the city, I am confident their expertise will benefit other local companies scale. Wattpad won’t be here today if it weren’t for their contributions and we will offer them our full support moving forward,” Lau said.