Better Collective Announces Layoffs Amid Declining Performance
Better Collective, the parent company of Playmaker HQ and Action Network, has announced the layoff of over 100 employees, a decision driven by declining performance, shifts in the U.S. market, and a slowdown in Brazil.
Key Factors Behind Better Collective’s Layoffs
The layoffs are attributed to several major factors. The company reported a downturn in financial performance, leading it to revise its 2024 forecast down by approximately 10%. This performance decline likely stems from a combination of contributing elements.
Better Collective has also cited a negative impact from “shifts in the U.S. market,” although sources do not specify the exact nature of these changes.
Brazil’s market conditions haven’t been favorable either, with regulatory developments expected to take effect only next year. This regulatory uncertainty has led to an “extended slowdown” in Better Collective’s business activities in the region.
An additional significant factor affecting layoffs, one that has impacted other companies in the affiliate industry as well, is the changes to Google’s search algorithms. These adjustments have led to a drop in search rankings for many mid-sized websites that Better Collective had acquired.
These sites primarily derived their value from organic search traffic, directing readers to partnered betting operators. It’s possible that the prices paid for these websites were overestimated, especially considering broader changes in the digital media landscape, where many sites struggle to monetize readership effectively.
Stock Decline
The layoffs at Better Collective have prompted a negative reaction from investors, resulting in a substantial decline in the company’s stock price. In the week preceding the layoff announcement, Better Collective’s shares dropped by 36.5%, settling at $13.08.
This decline followed the company’s adjustment of its 2024 financial forecast by about 10%.
Additionally, sources indicate that Better Collective’s stock fell from a 52-week high of $30.00 in February to a 52-week low of $12.52 at the beginning of the week the layoffs were announced.
As of the end of 2023, the company employed 1,211 people.
Catena Media Also Announces Layoffs
Like Better Collective, Catena Media has also implemented layoffs, letting go of 29 employees from its content and production departments.
These layoffs are intended to streamline operations and improve the company’s financial condition. Catena Media expects to save up to $2.4 million annually through this restructuring.
The company, much like Better Collective, points to challenging market conditions and changes to Google’s search algorithms as primary factors behind its decision to reduce staff.
In summary, affiliate market companies like Better Collective and Catena Media face similar challenges. Google’s changes, combined with overall market conditions, are prompting these companies to restructure and seek new ways to maintain profitability.
