Reddit to cut five percent of staff and faces user backlash over API fees

Reddit is also scaling back its hiring plans for this year, aiming to add only 100 new workers instead of the 300 it had originally projected

Reddit logo on a phone

Reddit is undergoing a major restructuring that will affect its workforce and developer community.

As reported by The Wall Street Journal, an email by company chief Steve Huffman states that Reddit will lay off 90 employees. 90 doesn’t seem to be a big number, but considering that Reddit has roughly 2,000 employees, 90 adds up to roughly 5 percent of its workforce.

The email also revealed that Reddit is scaling back its hiring plans for this year, aiming to add only 100 new workers instead of the 300 it had originally projected. “We’ve had a solid first half of the year, and this restructuring will position us to carry that momentum into the second half and beyond,” Huffman said in the email.

The company had filed paperwork to go public, and reports from earlier this year suggested that Reddit plans to go public in the second half of 2023. It also announced that it would start charging companies for access to its application program interface (API). Reddit doesn’t want other companies to be able to train their LLMs with its data for free, and wants a slice of the pie. Big names like Google and OpenAI have been using Reddit to provide initial guidance to their AI services. In response, Reddit announced that it will introduce a new premium access point for third parties to access Reddit’s APIs, with pricing expected to be split into tiers based on company size.

But this policy has sparked outrage among many developers and users who rely on third-party apps to access Reddit, as shared by Engadget. Some of these apps, such as Apollo for Reddit, Narwhal and Reddit is Fun, have warned their users that they cannot afford to pay for Reddit’s API and may have to shut down. Christian Selig, the sole developer of Apollo for Reddit, said that it would cost him $20 million a year to keep his app running as is.

In response, dozens of subreddit communities across various topics have announced that they will go dark starting on June 12th as a form of protest. Some of them plan to stay offline for 48 hours, while others intend to remain inactive indefinitely until Reddit addresses the issue.

Reddit isn’t the only tech company that is laying off employees. Apple, Spotify, Google, Microsoft and many more are in the same boat.

Source: The Wall Street Journal, Via: Engadget