Artsy recently laid off 15% of its employees, from different departments. The worsening economic situation and the fear of an even bigger recession influenced the decision of this online auction house. Chief executive Mike Steib called the laid off people to discuss their severance contract. He also suggested ones working in NY, work from home, so that everybody can process the news.
Artsy’s First Decade Fast Growing
Artsy representative confirmed information about dismissed workers: “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”. This online art marketplace is relatively new in the art world. Carter Cleveland founded the institution back in 2009, but went public three years later.
In the ensuing ten years, the company’s business strategy changed significantly. The Art Genome Project was a pilot undertaking, and it took on algorithmic learning to categorize and forecast users’ preferences in artwork. The tool later evolved into a monthly membership assistance, where galleries pay a fee for displaying art on the system.
One financing round in 2017 raised $50 million at a valuation of $275 million. Subsequent phases of funding combined to raise $100 million in investments. 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.
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Changes in Business
Artsy declared its first substantial cutbacks in February 2019 and then let go of another 20 staff members from its editing, communications, and curation departments. Before these cutbacks, co-funder Sebastian Cwilich stepped down as president and chief operating officer after a decade, in order to move to the Gagosian gallery. That June, Steib (formerly of XO Group Inc.) joined as CEO.
The 2019 layoffs were a result of the business’s attempts to concentrate on its artistic industry, Simon Warren, senior director of communications said. “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. Artsy, which bills itself as the art world’s largest digital sales platform with 1.7 million users, controversially raised its monthly membership prices mid-March 2020 by 40%.