The Washington Post has quietly laid off staff from Arc XP, the technology arm of the paper that Post leadership had previously considered selling or spinning off.
Last year, the Post declined offers to sell Arc XP, the company’s in house publishing tool and software business, saying it would instead invest $50 million in the business in 2023. But on August 22, the paper told several top marketing staffers, program managers, and product designers at Arc XP that the Post would be eliminating their roles in the coming weeks.
The move displeased staff, who have been furious with recurring layoffs at the paper over the past year. In a statement, the company’s union said it was frustrated with the cuts, saying the paper did not give staffers an explanation for why their roles were being eliminated. The union added that the cuts contradicted the paper’s previous claim that there would be no further layoffs this year.
“We are deeply frustrated to see the company continuing this harmful and ineffectual practice — which has been shown again and again to erode morale and productivity without actually saving money,” the Guild said in a statement to Semafor.
Since Amazon founder Jeff Bezos bought the Post in 2013, the paper has invested heavily in Arc, believing that the software company could represent a significant line of revenue beyond the paper’s advertising and subscription business.
The tech company within the Post boasts that it has $40-50 million in recurring revenue and over 100 clients, including the Golden State Warriors basketball team and BP.
Post executives declined an offer from a special purpose acquisition company to purchase Arc XP in 2022, saying that they believed the platform has long term value. In a document obtained by the Wall Street Journal, the Post said it believed Arc would generate over $200 million in annual recurring revenue by 2027, a significant increase over the money it generates today.
But this month’s layoffs suggest that the software service has not been immune from some of the headwinds affecting the rest of the paper. With subscriber numbers dipping from 3 million to 2.5 million, the Post is reportedly likely to lose nearly $100 million this year. The paper already laid off over 30 editorial staffers earlier this year, and new interim CEO Patty Stonesifer has been meeting with staff in recent months to discuss long-term “weeds” within the paper.