At Recurrent Ventures, Recurrent Layoffs Raise Questions of Mismanagement

The media company Recurrent Ventures, which operates a portfolio of editorial titles ranging from Popular Science to Field & Stream, eliminated the roles of 52 employees last week in a surprise round of cuts, according to documents obtained by Adweek. The layoffs, which affected the editorial departments at The Drive, Saveur, Popular Science and Task & Purpose, as well as commerce roles across the company, come two months after Recurrent Ventures abruptly sacked the staff of Mel Magazine. After shuttering Mel, which Recurrent Ventures operated for less than a year, chief executive Lance Johnson assured staff that no further cuts were coming. The media company reduced headcount as part of a necessary adjustment to achieve its financial goals amidst a challenging advertising economy, according to a representative of the company. But interviews with former and current employees describe the layoffs as blindsiding, the result of broader mismanagement from a company whose infrastructure has been overwhelmed by the sheer pace and scope of its acquisitive streak. Since launch in 2019, the North Equity-backed Recurrent Ventures raised more than $375 million in financing and acquired more than 20 editorial titles. It snapped up its most recent acquisition, Dwell, just last month. “The company scaled really quickly and did not build the proper infrastructure to make it work,” a person familiar with the situation told Adweek. “The one thing that is unclear is whether anyone on the senior executive level will pay for this.” Infographic: Who’s Advertising in a ‘Very Mixed Economy’? The layoffs heavily affected commerce coverage Recurrent employees targeted for elimination began receiving emails last Monday to schedule an unplanned meeting, sources told Adweek. In the brief video calls, management told staff the cuts were a result of a reorganization designed to help the company reach its financial objectives. Unlike the cuts to Mel, which were characterized as performance-based, these layoffs were the result of over-hiring. Eliminated roles span a wide spectrum, from assistant editor to virtual assistant, but the layoffs over-indexed in two key positions: commerce editor (6) and staff writer, commerce (4). The cuts to the commerce division come even after Johnson highlighted the business as one of the bright spots at the company, according to people familiar with the matter. Several eliminated staff had been actively recruited to join Recurrent Ventures and had joined the company just a few months prior. Many expressed disbelief at the irresponsibility of luring people away from stable work only to lay them off. Others came aboard when Recurrent Ventures acquired the publisher they worked for, buoyed by promises from management that they would gain access to more resources and support. On the North Equity website, Johnson writes, “We believe in building a new type of media company. One that gives editorial teams the innovative technology, capital and support they need to grow while implementing an equity structure to make every employee a shareholder.” A rapid clip of acquisitions left teams siloed Integrating newly acquired businesses into a parent company requires significant infrastructure and a time-tested process. At Recurrent Ventures, a lack of internal guidance led to key operational oversights, sources tell Adweek. Some editors never received budgetary guidelines for paying freelancers, and the patchwork nature of the editorial brands led to communication silos and planning redundancies. “Everything is chaotic,” said one source familiar with the situation. “Every brand has a different way of doing things and a different revenue style. There is no consistency, communication or guidance.” The problems extended into the technical, a key challenge when onboarding dozens of domains. A disastrous content migration at one publisher, for instance, led to a nosedive in traffic, while other sites endured user experience issues so persistent that they impacted search engine performance. Recurrent Ventures’ business operation also suffered key blunders, as its commerce-centric model floundered while affiliate rates across the industry slumped. While the media company has also introduced programmatic and direct sales operations, revenue from both have been soft this year, according to a person familiar with its finances. A decision to centralize the direct sales team also backfired, leading to layoffs and a restructuring of the sales team in July. The idea, while smart on paper, overlooked the degree of subject matter expertise that its salespeople needed in order to work with the niche advertisers that patronized its brands. Promises of a playbook ring hollow Recurrent Ventures promised staff time, resources and investment. But the focus on acquisitions rather than operational discipline left the company bloated and over-extended. “It feels like we’re having to pay for the mistakes made elsewhere in the company,” said one source. “The owners spent money on outlets like a drunk teenager with their mom’s credit card.” Resiliency Is the Best Currency for Agencies During a Recession