News aggregator SmartNews lays off 40% of its staff in the US and China, with further cuts expected in Japan • TechCrunch
SmartNews, a Tokyo-headquartered news aggregation website and app valued at $2 billion in 2021, today announced a 40% reduction in its workforce in the United States and China , or about 120 people, according to sources familiar with the company’s plans. The news was announced Thursday at an All-Hands meeting attended by SmartNews staff tonight. The company confirmed the layoffs to TechCrunch, saying “current economic conditions” were to blame.
Relevant roles in the US and China include engineering, product, and data science, we understand. SmartNews employees in Japan, meanwhile, will soon undergo a “voluntary departure program,” but they haven’t yet received details on what that will entail. Terminated employees will be offered standard severance and benefits packages. At the meeting, staff were told they would receive an email within 15 minutes if they were among those made redundant.
In total, SmartNews employs nearly 900 people, including its contract workforce, one-third of whom work outside of Japan.
Sources also told TechCrunch that the company chose to close its US offices for two days, Thursday and Friday, without giving a reason, which worried employees ahead of the All Hands meeting broadcast remotely.
“It’s not your fault and I’m sorry to see you go,” SmartNews CEO Ken Suzuki remarked during the announcement.
After the announcement, the meeting quickly ended, leaving no time for questions and answers, which frustrated some staff.
Founded in 2012 in Japan, the company came to the United States in 2014 and expanded its local news footprint in early 2020 to cover thousands of American cities. It maintains relationships with more than 3,000 global publisher partners whose content is available through its service on the web and mobile devices.
In its markets, the app has become one of the leading news aggregators due to the way it personalizes the reader’s experience using machine learning technology to choose which stories to display. In the United States, it has also differentiated itself from others with a “News From All Sides” feature, which allows users to access information across a range of political perspectives. Additionally, during high-profile events like the Covid-19 pandemic or US elections, SmartNews would offer in-app dashboards that offered critical information at a glance.
The company has been successful in attracting investors, raising more than $400 million since its inception in 2012, despite stiff competition from built-in aggregators like Apple News and Google News, on iOS and Android. In its most recent funding round, a Series F, investors invested $230 million in the company, valuing it as a “double unicorn” ($2 billion), the company’s press release said. New investors included Princeville Capital and Woodline Partners, based in the United States, as well as JIC Venture Growth Investments, Green Co-Invest Investment and Yamauchi-No.10 Family Office in Japan. Existing backers ACA Investments and SMBC Venture Capital also participated.
The SmartNews app has reached 30 million monthly active users worldwide, including 20 million in Japan and 10 million in the United States, according to our information. However, those numbers tend to fall in both markets by around 10-20%, a source said. Since January 2014, SmartNews has reached nearly 81 million installs worldwide across the App Store and Google Play, according to Sensor Tower estimates. In 2022, its largest markets by downloads were Japan (58%) and the United States (38%), Sensor Tower said.
SmartNews, unfortunately, has been hit by the same macro factors that have led to a number of tech industry layoffs in recent months, in addition to complications stemming from Apple’s implementation of App Tracking Transparency, or ATT. The new iOS privacy measure introduced in 2021 hurt companies whose business models relied on advertising, including Meta and Snap, while boosting Apple’s advertising business.
The company could have gone public in 2019, but management pushed for additional funding and a higher valuation. Now, that opportunity could slip.
Reached for comment, SmartNews confirmed the layoffs and issued the following statement:
Unfortunately, we are not immune to the current economic conditions that have negatively affected so many businesses. In order to maintain the health of our business and ensure future growth, we decided to go through a reorganization that affected many of our amazing employees. This was a decision of last resort for us, and we hope that the severance packages and career transition management services offered to affected employees will help them in their search for a new position.