The argument was that you can buy an obscene amount of storage and bandwidth for only a fraction of the money they were raising. It is even more true today. Look at the amount of storage and bandwidth archive.org uses and how little money they bring in. This is not a money issue in terms of running the site.
Now that the money printer is out of paper, investors are banging on the door, and the people on the other side of that door are panicking. It turns out a bunch of nerds and aficionados piping text through your servers does not equate to a hundred-billion-dollar business, and trying to force the issue will only make things worse.
Their expenses are still absurd given that, from my perspective they've literally done no improvement to the product in the last 5 years or more. Just maintain the API, have some staff to run the servers, pay a few admins to support the mods and feature freeze Reddit the site as much as possible.
It's way crazier that Reddit has 2k employees than that Twitter had 4k or whatever.
Edited from $2/month/user to $2/year/user.
But then the leadership would only be wealthy and not famous.
It feels like the focus on ad sales by so many platforms is due to their executives' personal preference in having broad ranging social influence (by playing gateway to the masses) instead of a predictable revenue stream.
The belief that they could further wield influence may drive them to be less concerned about near term profitability.
Merely by recording an actual profit, you have shown your hand to the investor, who can now estimate what your ceiling is. And it's never going to be as much as what it was when profits were merely hypothetical.
No one is throwing away the kind of audience reddit has.
Now the CEO might lose his job, but let's not get that twisted up with Reddit's survival.