The Messenger, a digital news startup founded by media executive Jimmy Finkelstein, to lay off staff after raising $50 million in funding

The Messenger, a digital news startup founded by a seasoned media investor and entrepreneur who previously owned The Hill, is reportedly set to lay off around two dozen employees this week due to financial challenges and diminishing cash reserves, according to a  report from The New York Times.

Launched last year with an initial funding of $50 million, The Messenger currently employs approximately 300 people and focuses on publishing articles covering politics, culture, and general-interest news.

The impending layoffs, part of a cost-cutting strategy, are expected to take place this week, according to an anonymous source cited by The New York Times. The company is grappling with financial difficulties exacerbated by a challenging digital advertising market, the source told The Times.

“The employees are expected to be laid off this week as part of a cost-cutting measure, said the person, who would speak only anonymously because the staff had not yet been notified. The company is facing financial headwinds in a tough digital ad market that have put a squeeze on its operations, the person said,” The New Yorks Times reported.

Adding to The Messenger’s woes, The New York Post also reported that Richard Beckman, the president of the embattled startup, has announced his departure from the company on Tuesday as it initiates another round of layoffs.

Beckman, a former Conde Nast executive known for his assertive business approach and nicknamed “Mad Dog,” played a key role in generating revenue for the website, which was launched in May. Before the startup’s debut, Beckman had confidently predicted in a New York Times profile that the site would achieve over $100 million in revenue in 2024, attract 100 million monthly readers, and employ hundreds of reporters nationwide.

Meanwhile, on Wednesday, The Messenger dismissed a report suggesting that the struggling startup would shut down by the end of the month as “beyond absurd.” The New York Post reported that the board members had reportedly met last Friday to consider closing the startup as it faced a potential cash shortage by the end of January, according to earlier reports from Semafor.

Contrary to these reports, a spokeswoman for The Messenger refuted the claims made by the rival news outlet. She stated, “We have already secured investment as part of our second raise, and so the notion of us discussing closure is beyond absurd,” in a response to The Post.

The news about The Messenger’s possible closure emerged a day after Finkelstein announced plans to cut approximately two dozen of the company’s nearly 300 staff and confirmed the departure of president Richard Beckman, as reported by The Post.

Finkelstein, who initially infused $50 million into the site, reportedly called the meeting to address the company’s precarious financial situation, according to sources cited by Semafor. These sources claimed that the organization had only enough funds to last for several more weeks and would need to implement substantial cuts to secure additional funding for survival.

It was also reported that Finkelstein was open to the possibility of selling the business, as per Semafor, a news outlet co-founded in 2022 by former New York Times media columnist Ben Smith.