[pavs]

It really boggles my mind till today what the hell do they do with so many employees?

Is it a standard practice for startups for keep many employees to justify raising more funds?

They have no significant changes in how the site works, at-least in the last 2 years or so. The site speed, though better, still sucks. No new features. Site gaming is rampant (just look at the comments).

What are they doing?

[patio11]

What are they doing?

Ad sales. It isn't a very headcount-efficient endeavor once you get past self-served options. A lot of the big corporate branding accounts who have huge amounts of money to burn and don't track conversions (I believe in poker these are referred to as "fish") require someone to chat up the media buyer for a while.

Branding campaigns are only a backup strategy, mind you, in case that Digg doesn't sell out their inventory of inflated page views by rabidly anti-commercial poor adolescents. For some unfathomable reason.

[FlorinAndrei]

"What are they doing?"

Right now? Layoffs.

[pavs]

But they are also hiring for quite some time now, its not like they are laying of people because of money crunch.