Naver US Subsidiary Wattpad Terminates Staff in New Round of Layoffs

Wattpad, Naver Corporation’s subsidiary in the United States, reportedly laid off about 30 employees in the latest round of job cuts. This would be an additional to the 15% of its workforce that was terminated earlier this year.

Merged Business’ Success Hindered by Slowdown

According to The Korea Economic Daily, this is the second round of layoffs since March of 2023, when it let go of 42 staff. It was noted that despite recruiting around 100 new workers in the last two years, the expected synergy that would have been created from the merger of Naver Webtoon and Wattpad was not realized. Thus, the companies were forced to reduce the size of their workforce.

Wattpad was purchased by Naver Corporation in 2021, and $600 million was paid for the deal. The South Korean tech firm and online platform expected a lot with its merger with the American popular content publishing and reading company, but the expectations are not being fulfilled.

Instead, they are experiencing a business slowdown as the content market has declined since the world started recovering from the COVID-19 pandemic. This means that after hiring a hundred new employees last year and actively starting their webtoon and content operations, they failed to churn out profit, which was part of the layoffs.

Future Plans and Stock Listing

At any rate, the layoffs could also be part of Wattpad’s plan to simplify its operations as Naver Webtoon is planning a US stock listing. The companies are also collaborating to accelerate their respective webtoon and web novel intellectual property (IP) for adaptations into visual content.

Meanwhile, Korea’s Edaily reported that Naver Webtoon and Wattpad will continue their video production business through their signed deal with Zeta Studios. This Spanish production company developed the popular Netflix series titled “Elite.”

Photo by: Wattpad Press Release