Naver Corp.’s North American subsidiary Wattpad, a prominent original fiction platform, has implemented another round of layoffs, marking the second instance of workforce reduction since last year. According to recent reports from the webtoon industry, Wattpad has laid off approximately 30 employees, constituting about 15% of its total staff.
This development follows the previous layoffs in March of the preceding year when 42 employees were dismissed. The move comes despite Wattpad’s growth trajectory following its acquisition by Naver for $600 million in 2021. Over the past two years, Wattpad had expanded its team by hiring around 100 new employees. However, the anticipated synergy between Wattpad and the North American unit of Webtoon Entertainment, a branch of Naver Webtoon, has yet to fully materialize.
The global content market has been facing challenges since the transition from the COVID-19 pandemic to an endemic phase, leading Wattpad to streamline its operations. This strategic shift appears to align with Naver Webtoon’s plans for a potential U.S. stock listing, necessitating operational efficiency and cost-effectiveness.
Despite these layoffs, Naver Webtoon continues its collaboration with Wattpad, focusing on adapting webtoon and web novel intellectual properties (IP) into visual content. This collaboration has already led to significant initiatives, including Wattpad Webtoon Studios’ plans for a Spanish-language film. Furthermore, Wattpad recently partnered with Zeta Producciones, a Spanish production company known for the Netflix series “Elite,” highlighting its ongoing efforts to expand and adapt its content for diverse media platforms.
These layoffs at Wattpad underscore the complexities and challenges within the global content market, particularly in the post-pandemic era. They also reflect the balancing act that content companies must perform between expansion, innovation, and maintaining operational sustainability in a rapidly changing industry landscape.
