According to individuals acquainted with the company’s plans, SmartNews, a news aggregation website and app with headquarters in Tokyo, today announced a 40% decrease of its U.S. and China personnel, or roughly 120 people. The announcement was made on Thursday during an All-Hands meeting that the SmartNews team was present for this evening. The business informed TechCrunch of the layoffs and blamed the “current economic conditions.”
We know that roles in engineering, product development, and data science are affected in both China and the United States. Employees of SmartNews in Japan will shortly take part in a “voluntary leave program,” however specifics haven’t yet been provided. Employees who are laid off will be given the usual perks and severance packages. Staff members were informed in the meeting that if they were among those being let go, they would get an email within 15 minutes.
One-third of the almost 900 workers employed by SmartNews—including its contract workforce—are located outside of Japan.
Additionally, sources informed TechCrunch that the decision to shut down the company’s American operations for two days on Thursday and Friday without providing a justification alarmed staff members in advance of the remotely televised All Hands meeting.
The news was made by Ken Suzuki, CEO of SmartNews, who said, “This isn’t your fault and I am sorry to see you go.
There was little time for questions or answers after the news because the meeting finished so fast, which annoyed some employees.
The business was established in Japan in 2012, extended to the United States in 2014, and began to reach thousands of American cities in early 2020. Through its service, content from more than 3,000 global publishing partners is accessible on the web and mobile devices.
Because it uses machine learning to choose which stories are presented and personalizes the reader’s experience, the app has become a top news aggregator in its markets. With a “News From All Sides” feature that enables users to get news from a variety of political perspectives, it set itself apart from competitors in the US. In addition, SmartNews would provide in-app dashboards that provided essential information at a glance during high-profile events like the Covid-19 pandemic or the US elections.
Despite stiff competition from built-in aggregators like Apple News and Google News on iOS and Android, the company was able to attract investors, raising more than $400 million since its establishment in 2012. According to the company’s press release, investors gave the company $230 million in its Series F fundraising round, valuing it as a “double unicorn” ($2 billion). Princeville Capital and Woodline Partners from the United States, as well as JIC Venture Growth Investments, Green Co-Invest Investment, and Yamauchi-No.10 Family Office from Japan, were among the new investors. Participants included previous sponsors ACA Investments and SMBC Venture Capital.
We hear that the SmartNews app has 30 million monthly active users worldwide, 20 million of whom are in Japan and 10 million of whom are in the United States. However, a source claimed that such figures have been declining by about 10 to 20% in both markets. According to estimations from Sensor Tower, SmartNews has amassed close to 81 million global installs from the App Store and Google Play since January 2014. According to Sensor Tower, the U.S. (38% of downloads) and Japan (58%) were its two largest markets as of 2022.
Unfortunately, the same financial concerns that recently resulted in several IT industry layoffs also affected SmartNews, and there were also issues with Apple’s deployment of App Tracking Transparency, or ATT. Apple’s own advertising business was benefited by the new iOS privacy safeguard that was implemented in 2021, but it damaged businesses like Meta and Snap whose business models relied on advertising.
2019 was the deadline for the business to go public, but the leadership pushed for more money and a better valuation. That window of opportunity might be closing now.
When asked for comment, SmartNews provided the following statement and verified the layoffs:
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 company and to ensure future growth, we decided to conduct a reorganization that has impacted many of our incredible employees. This was a last resort decision for us, and we hope the severance packages and career transition management services offered to impacted employees will help in their search for a new role.