This has not been a good week for Digg, and it’s only Tuesday.
First, the content-sharing site announced Monday that it would slash its staff from 67 to 42. Then, later that day, Digg user LtGenPanda published a long, detailed blog post titled, “Did Digg game its own system to benefit publisher partners?” and accusing Digg of creating fake accounts to boost the Digg referrals of its publishing partners.
Recently named Digg CEO Matt Williams on the layoffs, from the Digg Blog:
When I joined Digg six weeks ago, we set an immediate focus on improving the Web site. We listened carefully to user feedback and started making changes to generate momentum in our business.
As I mentioned in one of our first all-hands meetings, another top priority was to take a hard look at the entire business, across product, sales, and operations. Through the time I have spent with each of you, I’ve been impressed by the commitment and enthusiasm you’ve shown. I’ve also learned a great deal about what is working well at Digg, and what is broken.
Many things are working well. The team is listening and acting quickly on the feedback from our passionate community. We’ve been able to deliver nimbly on the new platform, with over 100 bug and feature releases to the web site in the past two months. Our Diggable ads product has seen a notable increase in use by advertisers and clicks by users.
Unfortunately, to reach our goals, we have to take some difficult steps. The fact is our business has a burn rate that is too high. We must significantly cut our expenses to achieve profitability in 2011. 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.
