A message to Outside staff from CEO Robin Thurston

Team,

Today was tough. Really tough. By now, you’re aware that we said goodbye to many talented colleagues who’ve contributed to Outside’s ongoing evolution. I take full responsibility for the decisions leading up to this moment — and for the focus and leadership you deserve from me and the entire management team.

Earlier this year, we began a major push to focus on profitability, with significant steps beginning in May to reduce expenses across all areas of the business. Unfortunately, the economic headwinds that every media and technology business is facing have only intensified, and those reductions haven’t closed the gap enough on the timeline we must hit.

The decision to part ways with 12% of our staff today was especially difficult given that the fundamentals of our business are sound. We’ve made meaningful progress on membership and product development, and we’re seeing the fruits of increased collaboration across our teams. That said, we must make Outside self-sustaining. Getting to profitability will enable us to control our destiny as co-owners of a company with an extremely important mission.

I’ll address these decisions and the contributing factors in more detail in tomorrow’s Town Hall, but want to review the key issues here.

External factors

Rising prices, higher interest rates, and continued supply chain disruptions are creating unprecedented pressures that are being felt in every household and company. While we are hitting our revised membership goals, the slowdown in consumer spending has affected our events and cut into the double-digit growth in ad sales we enjoyed in the first three quarters of the year.

These headwinds put an immediate strain on the critical goal of achieving profitability by next fall. In our last Town Hall, I explained why this is so important in this timeframe and talked about our efforts to raise additional capital. We were able to secure new funding in the last 60 days, but in order to achieve profitability by Q3 2023 — and offset these revenue and cost pressures — we must manage our costs more tightly.

This forced us to take a hard look at the next 6–9 months and evaluate the odds of an economic rebound. While we’re very confident in our membership growth based on improving conversion rates, the leading indicators on ad revenue are negative. Our sales team is reporting that clients are reducing or delaying 2023 commitments, and virtually every economist is predicting recession. Numerous high-profile media and tech companies are forecasting advertising decline, and we’ve all witnessed significant layoffs in our industry in recent weeks.

These trends will make further fundraising nearly impossible for the foreseeable future. In such an environment, the only responsible move for a company like ours is to get leaner and focus spending on our core businesses — to which we remain 100% committed — and on the opportunities they present to acquire more members and ad revenue.

Internal factors

Have we made decisions that contributed to this situation? Yes. We’ve pursued ambitious growth projections and spent too freely. We’ve made investments that I’d think twice about now, and we’ve been slower to realize synergies when adding new companies. We’ve also scaled staffing and compensation at a much faster rate than we’ve grown revenue.

What we’re trying to do is really, really hard. A number of the businesses we bought were extremely challenged, and we knew it would be tough to turn them around. There have been surprises with some of the companies we acquired, and then there’s the COVID hangover that’s impacted almost everyone in the Outdoor industry in one way or another.

Reinvention is never an easy or linear path. We’re making really big strides as we innovate a completely new media model, and our core business — which rests on a foundation of amazing reader engagement — will weather today’s hurdles.

Changes and next steps

The entire executive team joins me in acknowledging the imperfect decisions made while building this complex new organization. Since May, we’ve taken meaningful steps on spending that will strengthen our business. These started with aggressive action by your department heads to reduce non-employee costs, especially software, consultants, facilities, and travel. We focused here first in an effort to preserve core investments in staff, membership, and product.

Unfortunately, it wasn’t enough. To achieve profitability and control our destiny, we have no choice but to reduce headcount. With great reluctance, we gathered division leaders and asked them to reimagine their teams with three priorities in mind:

• Streamline team structure in ways that reduce management layers and increase cross-functional collaboration
• Retain top performers while eliminating duplicative roles and individuals with documented performance challenges
• Focus resources on the brands and activities that are contributing to membership growth, advertising sales, or events services.

That process resulted in the changes we made today. We will be taking additional steps that we’ll discuss in tomorrow’s Town Hall to improve our reporting and financial accountability.

What happens to those affected

For those who left Outside today, we have modified our standard severance program to provide additional support into the new year.

First, we extended severance payments to a minimum 6 weeks’ pay, regardless of tenure. This will give departing employees time to get through the holidays and start looking for new roles.

Second, we will cover the costs of COBRA health insurance through to February 1, 2023.

Third, we have provided every employee the opportunity to seek professional career coaching to get help with their resumes, networks, and job-search strategies.

Fourth, we have extended access to LifeGuides so they can tap these resources and strategies for emotional and mental well-being.

Fifth, we have extended the exercise window on their equity from 90 days to 5 years. We firmly believe that all employees should be owners of this company and by extending the time that departing employees have to exercise their stock options, it gives them more of a chance to participate in the equity upside in the future.

What’s next

There’s no good way to do a layoff, but please know that we’re treating your former colleagues respectfully by providing severance, healthcare, and job placement support. Over the coming months, we’ll do everything we can to help them secure new employment. I encourage you to assist them, too, by providing references and making connections.

For those of us still here, there’s bound to be sadness and anxiety, even consternation. All of this is natural, and I invite you to share your thoughts directly with me or any other leader. I’d also ask you to take care of yourself and each other. We’ll take Friday off so everyone has some time to hopefully get outdoors.

When taking any uncharted journey, like the one we’re on at Outside, course corrections are not only inevitable but critical. But we will see this through. Our audience loves your work, our brands’ market share continues to grow, and the new Outside+ bundle is hitting its stride. By further focusing our resources on the core pillars of membership, content, mapping, and event services, we are making our business more resilient. Most importantly, I know every single one of you believes in the importance of our mission. Getting everyone outside is our north star, and you are the reason we will achieve it together.

I love this company and our mission and will not give up until we can celebrate its success together.

Thank you, Robin