The Washington Post laid off seven staffers last week from Arc XP, a tech division devoted to cloud-based publishing software that The Post’s leadership has looked to as a growth area for the media company.
The move angered representatives of the Post’s union, who argued that the dismissals, executed quietly, contradicted the company’s reassurances earlier this year that it would avoid more layoffs in 2023.
The Post launched Arc XP in 2015 with the support of owner Jeff Bezos and a goal to diversify revenue beyond the company’s traditional news products. With nearly 2,000 customers and 250 employees, it reportedly has earned $40 million to $50 million a year.
“I personally think that in the long run — and by long run, I mean, three, four years, not 15 years — Arc XP will be the biggest source of revenue for The Post, and certainly the most profitable source of revenue for The Post,” Shailesh Prakash, at the time the Post’s chief information officer, told Axios last year. Prakash left the company last year for an executive role at Google.
But the Wall Street Journal reported earlier this year that Arc XP was not yet profitable, earning revenue well below the $200 million a year it hopes to achieve by 2027.
It is not clear whether the layoffs will temper the company’s bullishness on Arc XP’s future. Jennifer Lee, the company spokeswoman, said in her statement that the division has “aggressive growth plans.”
Though the seven laid-off staffers were not eligible to be a part of the union representing editorial employees, its leaders were already on high alert after the newspaper laid off 31 staffers between November and January.
The Baltimore-Washington Newspaper Guild released a statement “condemn[ing] these layoffs and the secretive manner in which they were conducted.”
It continued: “We can only assume that, after repeatedly telling the Guild there were no plans for further layoffs this year, the company didn’t want anyone to know they were going back on their word.”