News aggregator SmartNews lays off 40% of staff in US and China, with further reductions planned in Japan businessupdates.org

by Ana Lopez

SmartNews, a Tokyo-based news aggregation website and app worth $2 billion from 2021, today announced a 40% reduction in its U.S. and China workforce, or about 120 people, according to sources familiar with the company’s plans. Company. The news was announced Thursday at an All-Hands meeting attended by SmartNews employees tonight. The company confirmed the layoffs to businessupdates.org, saying “current economic conditions” were to blame.

Impacted roles in the US and China include those in engineering, product and data science, we understand. Meanwhile, SmartNews employees in Japan will soon undergo a “voluntary departure program” but have not yet been offered details of what that entails. Dismissed employees are offered standard severance pay and benefits. During the meeting, employees were told they would receive an email within 15 minutes if they were among those fired.

In total, SmartNews employs nearly 900 people, including contract staff, a third of whom work outside Japan.

Sources also told businessupdates.org that the company opted to close its US offices for two days, Thursday and Friday, without giving a reason, worrying employees ahead of the remotely-streamed All Hands meeting.

“This isn’t your fault and I’m sorry to see you leave,” Ken Suzuki, CEO of SmartNews, commented when he made the announcement.

After the announcement was made, the meeting ended quickly, leaving no time for Q&A, frustrating some employees.

Founded in Japan in 2012, the company arrived in the US in 2014 and expanded its local news footprint to thousands of US cities in early 2020. It has relationships with more than 3,000 global publishing partners whose content is available through its service across the web and mobile devices.

In its markets, the app rose to become a top news aggregator because of the way it personalizes the reader’s experience using machine learning technology to choose which articles to display. In the US, it also stood out from others with a “News from All Sides” feature, which allows users to access news from different political perspectives. In addition, during high-profile events such as the Covid-19 pandemic or US elections, SmartNews would provide in-app dashboards that provided critical information at a glance.

The company managed to attract investors and raised 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 the most recent round of funding, a Series F, investors poured $230 million into the company, valuing it as a “double unicorn” ($2 billion), according to the company’s press release. New investors included US-based Princeville Capital and Woodline Partners, as well as JIC Venture Growth Investments, Green Co-Invest Investment and Japan’s Yamauchi-No.10 Family Office. Existing lenders ACA Investments and SMBC Venture Capital also participated.

The SmartNews app reached 30 million monthly active users worldwide, with 20 million in Japan and 10 million in the United States, we understand. However, those numbers are down about 10-20% in both markets, a source said. As of January 2014, SmartNews has reached nearly 81 million global installs from the App Store and Google Play, according to Sensor Tower estimates. As of 2022, Japan (58%) and the US (38%) were the largest markets by downloads, according to Sensor Tower.

SmartNews was unfortunately impacted by the same macroeconomic factors that have led to a number of layoffs in the tech industry in recent months, in addition to complications arising from Apple’s implementation of App Tracking Transparency, or ATT. iOS’s new privacy measure introduced in 2021 harmed companies whose business models depended on advertising, including Meta and Snapwhile Apple’s own advertising business gets a boost.

The company could have gone public in 2019, but leaders pushed for additional funding and a higher valuation. Now that opportunity could slip.

Reached for comment, SmartNews confirmed the layoffs and offered the following statement:

Unfortunately, we are not immune to the current economic conditions that have negatively impacted so many businesses. To maintain the health of our business and ensure future growth, we have decided to go through a reorganization that has impacted many of our great employees. This was a last resort for us, and we hope that the severance payments and career guidance services being offered to affected employees will help them in their search for a new position.

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