Bottom line: Patreon is in a rare category considering it may have actually benefited from the pandemic due to creatives flocking to the platform after losing their real-world jobs. It's a bit concerning, then, that the company is now laying off 13 percent of its employees despite admitting that it is in a strong cash position and after adding 50,000 new creators last month.
While many are suffering through economic hardships during Covid-19, some businesses are actually in the rare position to benefit from the pandemic. Such appeared to be the case with online membership platform Patreon last month when the company said more than 30,000 new creators had joined its platform in the first three weeks of March alone.
Patreon said it had also witnessed a slight elevation in the number of pledge deletions but noted that it wasn't nearly enough to offset the increasing number of new pledges coming in.
In a recent statement to TechCrunch, Patreon said it added a total of 50,000 new creators through the end of March and that the average income for creators was 60 percent higher than previous months. The recent surge, combined with years of continuous growth, has put Patreon in a strong financial position, a spokesperson said.
Despite its strong cash position, Patreon ultimately said it is unsure how long the current economic uncertainty will last. As a result, the leadership team decided to part ways with 13 percent of Patreon's workforce.
The spokesperson said the decision was not made lightly and consisted of several other factors beyond just financials. "Prior to the pandemic, we had completed an in-depth performance review cycle and deployed a new company strategy - both exercises highlighted the need for different skill sets moving forward."
Patreon believes it will emerge from the layoffs as an even stronger company, both financially and strategically.