Demand Media is the parent company that owns major web properties such as Cracked, eHow, Livestrong.com, Demand Vertical Network and others. On Monday morning at 10AM, the employees of this company’s Austin, TX office were brought into a meeting where they were told that the office was closing and all of the employees were losing their jobs. This is impacting nearly 100 employees of the company.
No information was provided about why the office was closing, but according to reports from the impacted employees, they were completely surprised by the move.
Demand Media has been going through some difficult times with revenue down by 47% in their Content & Media division, though much of that was offset by rises in their marketplace revenue. The publically traded stock was also downgraded to ‘sell’ status not long ago.
There were rumors floating around that Demand Media was attempting to sell some of their web properties including eHow, Cracked and Livestrong, but that there were no buyers. It could be that Demand Media decided that shedding these employees and the expenses associated with the office was an alternative option for saving money and hopefully turning the company around.
Lower monetization levels from cost-per-click ads have been blamed for revenue dropping from $209.4M in 2013 to 172.4M in 2014, but it is not entirely clear whether that has anything to do with the decision to close this office.
At this point Demand Media is not putting any information out about this announcement, but it is certainly something that we here at Performance Marketing Insider will be keeping a close eye on.
