No, they're just flailing.
The problem with Reddit is that its product is ideological conformity; but its owners are too busy pretending (or actually believing) that's not true to sell it honestly. Mods are, to put it bluntly, mostly replaceable, and charging for the ability to moderate an established large subreddit would go a long way provided whoever buys that power must go out of their way to plausibly deny that.
And ideological conformity is worth a lot of money- Twitter was fairly valued in the tens of billions for a very good reason- but much like Twitter, that sort of thing sells "at a loss" because having the kind of content which enforcement of ideological conformity upon is meaningful necessarily means major companies won't want to put their products next to that content. Reddit is not a product that can generate a concrete return on investment, which is partially why it can survive operating at a net loss for a long, long time; capital directly funds political power.
Cheap capital drying up means money is tighter- so financiers are getting harder to come by- and if you're in straits that dire and don't want to downsize you have to look for other sources of revenue. In Reddit's case, this will completely kill their main product, but they have a mental block that prevents them from dealing with that honestly so they might be screwed.
>Mastodon has issues with scaling, but that's because their protocol is super-redundant in an effort to be decentralized (and apparently also kind of sucks)
Mastodon has the same kind problem that Reddit does but massively amplified- server operators have power over user networks (the same thing happens on Reddit with bots) which is a no-go for honest communication.