Online art brokerage Artsy has laid off 35 staffers, or around 15 percent of its workforce, as forecasts of a US recession swing, seemingly by the hour, between bright and bleak.
In a June 21 email obtained by ARTnews, chief executive Mike Steib informed staff that those terminated would receive—within five minutes—a calendar invite to discuss severance packages. Steib also recommended that New York-based employees work from home to “give everyone privacy to process this news.”
“For now I’ll note that, though our business is stable and revenue has been growing, the broader economic headwinds and art market slow down were pushing profitability out of reach this year, which would have put our business and mission in jeopardy,” he wrote in the email.
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A spokesperson for Artsy confirmed in an email to ARTnews that it had “parted ways” with 35 employees: “This decision was not made lightly but allows us to continue to operate sustainably and support our thousands of gallery partners and the artists they serve.”
Artsy was founded in 2009 as Art.sy and publicly launched three years later. The company’s business model has rapidly evolved in the decade since. The first initiative, called the Art Genome Project, used machine learning to catalogue and predict visitors’ visual art tastes; the tool was later enveloped into a subscription service in which galleries paid a monthly fee to host artworks on the platform. An editorial section was added to generate traffic to the platform. As was standard for websites in the early 2010s: clicks, or impressions, were marketed to investors as potential customers.
Successive funding rounds netted $100 million in investment; a single round in 2017 brought in $50 million at $275 million valuation. It boasted a who’s who of high-profile investors from art and tech, including mega-gallerist Larry Gagosian, art collector and founder of Moscow’s Garage Museum of Contemporary Art Dasha Zhukova, Twitter and Block founder Jack Dorsey, and art collector Wendi Deng Murdoch.
In February 2019, Artsy announced its first significant layoffs, when most of the content-sales division was terminated, followed that September by an additional 20 employees across its editorial, communications, and curatorial sections.
Per reports at the time, the total culled represented 10 percent of Artsy’s staff and included the remaining members of the content-sales team. Shortly before the layoffs, Sebastian Cwilich, Artsy cofounder with Carter Cleveland, stepped down after nine years as president and chief operating officer, to join Gagosian gallery. That June, Steib (formerly of XO Group Inc.) joined as CEO.
Simon Warren, Artsy’s senior director of communications, told ARTnews via email at the time that the 2019 layoffs were part of the company’s efforts to focus on its art marketplace, which is “an increasingly meaningful source of revenue and key area of growth for our business.”
“A very modest single-digit reduction in our workforce will help support this increased investment in our marketplace . . . as well as our continued investment in Artsy’s editorial platform,” Warren wrote.
In 2020, as the coronavirus forced non-essential businesses to shutter, most galleries with money to spare moved their dealings online. That year, Artsy, which bills itself as the art world’s largest digital sales platform with 2.5 million users as of 2023, and according to a report in the Art Newspaper, detailed a 15 percent commission on the “buy now” feature introduced earlier that year. Membership prices before then typically fell between $400 and $1,000, and commission rates capped around 5 percent. (As a private company, Artsy isn’t obligated to report profits or losses.) Artsy reportedly offered reduced membership rates to small galleries particularly affected by the effects of coronavirus and discounts to some galleries that were impacted by canceled or postponed fairs, including non-member organizations.
As 2020 progressed, however, the company faced backlash from clients soured by the self-promotion of its listing packages; in an internal newsletter reviewed by the Art Newspaper, Steib positively noted a 25 percent increase in website traffic following the prolonged shutdown of nonessential businesses. (He apologized for the email’s tactlessness in a subsequent statement.)
His June 21 email was similarly contrite. “With these changes,” he wrote, “Artsy will reach the financial sustainability we’ve worked so hard to achieve, ensuring we can continue to serve our partners and collectors and build a better art world for many years to come.”
“I wish we could have gotten there another way,” he added. “I want to say I am sorry to each of you who I have let down today.”