Two executives have left Digg after CEO Matt Williams announced that jobs would have to be cut.
The CEO has endured a tough few weeks since taking over the website with major changes poorly received by the site’s loyal users, many of whom have switched to rival Reddit in protest.
This situation was compounded when Williams announced, via a reposted a letter to Digg staff on the site blog, that it would now be necessary to cut staff numbers. He said: “The fact is our business has a burn rate that is too high. We must significantly cut our expenses to achieve profitability in 2011.”
Members of staff decided to give Williams a helping hand by doing the job for him and heading straight out the door. Publisher and Chief Revenue officer Chas Edwards was first to leave, joining photo and ad network Pixazza, before CFO and HR exec John Moffett, who has been with the company for five years, also packed his bags.
Chas Edwards mentioned in his personal blog that while he will be leaving his full time role he will still be acting as a “strategic advisor” to the firm. Not bad work if you can get it.
“In a few weeks, I’ll be joining the team at Pixazza as Chief Revenue Officer and Head of Publisher Development,” Edwards said.
“While I’m handing off daily management responsibilities, I’ll stay on as a strategic advisor to Digg. In that capacity, I’ll be helping with Digg’s ad platform strategy.”
Williams stated that he hoped the 37 percent reduction in staff would ultimately help preserve the site:
“We’ve considered all of the possible options for reduction, from salaries to fixed costs. The result is that, in addition to lowering many of our operational costs, I’ve made the decision to downsize our staff from 67 to 42 people.”
“It’s been an incredibly tough decision. I wish it weren’t necessary. However, I know it’s the right choice for Digg’s future success as a business. I’m personally committed to help find new opportunities for everyone affected by the transition. Digg’s Board members have also offered to help find placements within their portfolio companies,” said Williams in his open letter.
“Let’s please use today to show our sincere appreciation for our friends and colleagues who will be moving on. Tomorrow, we’ll go forward with a new strategy for Digg.”
Meanwhile, former CEO Jay Adelsen commented rather unhelpfully at the FailCon conference in San Francisco that “the jury is out” on whether Digg can weather yet another storm under Williams’ brief tenure.