For the fourth time in the span of roughly two years, affiliate company Catena Media is laying off staff. From a peak of more than 450 employees, there are now reportedly less than 150 members of the team left.
In advance of another negative earnings report, the Swedish company announced the planned layoffs, which amount to roughly $5.5 million in reduced salary spending.
“Organizational changes spanned all levels, including senior management. In addition to reducing the cost base, the purpose was to establish a flatter internal structure with fewer layers to promote agility. The steps taken were tough, but essential to embed a sustainable cost trajectory and ensure every part of the business is set up to support growth and fast delivery,” Catena Media CEO Manuel Stan said about the move in a company statement.
Consecutive Google algorithm updates hampered bottom line
Q1 was, by Stan’s own admission, a disappointing one for the organization. Revenue was down 39% from the previous year, thanks to a range of factors including Google algorithm volatility and the lack of new regulated markets in the U.S.
“At the end of Q4, we saw back-to-back Google algorithm updates which had impacts on the rankings and performance heading into Q1. The high volatility continued into Q1,” Stan explained.
With stalled activity in terms of regulated gaming expansion in North America, which was responsible for 89% of Catena Media’s revenues this quarter, sweepstakes sites and the emerging vertical of prediction markets have provided revenue amidst the struggles.
Catena still invested in sweepstakes, prediction markets
“As previously communicated, we are definitely supporting regulation in the casino segment, and this is favorable for long-term industry sustainability. We are not operating in any of the states where sweeps are clearly not legal,” Stan said regarding the crackdown on sweepstakes.
As for prediction markets, the company is taking a more cautious approach.
“When it comes to sports prediction markets and so on, I think it’s it’s a new vertical that obviously we’re embracing. We do not have any any position in terms of how that will develop, but for time being, we’re trying to to monetize that part of the industry and be one of the forefront layers in anything to do with this kind of markets.”
Stan did point to Alberta and Missouri as markets heading towards launch in the next 18 months that should help inject new revenue into the company.
Catena Media is one of a number of affiliates with a North American focus to struggle over the past two years. The company sold off its U.K. and Australian assets in 2023 to focus on what was at the time success in the States.
