This reminds me a lot of what happened to Waypoint with Vice. They were running on an ad-based model since their inception, and then they launched Waypoint Plus (their subscription model) to basically save themselves from extinction. Then Vice itself hit the bankruptcy wall, so the Waypoint staff were all laid off because, while Waypoint Plus was profitable and sustainable, it wasn’t growing.
Then the laid off staff just launched their own subscription-based small business and, at least for now, it seems like they’re better off. Based on other comments, it looks like that is what the Escapist Staff is doing with Second Wind.