Toronto-based storytelling platform Wattpad, owned by Naver’s Webtoon Entertainment, has recently concluded a second round of layoffs, affecting around 30 jobs, or approximately 15% of its workforce, according to sources familiar with the matter.
The restructuring initiative aligns with the company’s strategy to streamline operations and reduce costs, a move seen as part of its parent company’s financial optimisation ahead of a potential initial public offering (IPO) in the United States, potentially in 2025.
Webtoon Entertainment, based in LA, oversees three storytelling subsidiaries, including Wattpad in Toronto, Naver Webtoon in Seoul, and Line Digital Frontier in Tokyo. This recent round of layoffs follows a similar move in March 2023, where Wattpad reduced its workforce by 15%, affecting 42 employees out of 267.
The restructuring aims to enhance financial stability as the parent company, Webtoon Entertainment, positions itself for future growth and strategic initiatives. Wattpad, founded by Allen Lau in 2006, was acquired by Naver in 2021 for $600 million, integrating the storytelling platform into its publishing division.
Wattpad has been exploring new revenue models, such as the introduction of “Wattpad Originals” in October last year, which allows writers to place certain chapters behind a paywall, providing readers with a freemium model to access free content while offering paid options. The company also introduced “Premium Picks,” offering Premium and Premium+ subscribers monthly access to selected Wattpad Originals.
The economic environment, coupled with changing business realities and needs, has prompted these strategic decisions. Wattpad aims to adapt to evolving market dynamics while continuing to provide engaging storytelling experiences to its global user base.
As part of the layoff support, departing employees will receive at least 12 weeks of severance, six months of continued benefits, and the option to retain office-allocated devices. The company emphasizes that these decisions are not a reflection of individual contributions but are responses to broader economic challenges.
Despite the workforce reduction, Wattpad remains committed to its mission of fostering a vibrant community of storytellers and readers. The platform has been a significant player in the online storytelling landscape, empowering creators and engaging readers globally.
