Correction: This article has been updated to reflect the correct number of G/O Media layoffs and G/O Media properties. G/O Media laid off 13 employees on April 3, which represents about 3 percent of the 400-person staff. The Moguldom article stated otherwise. G/O Media brands include The Root, Gizmodo, Jalopnik, Jezebel, Deadspin, Lifehacker, Kotaku, The Onion, AV Club, The Inventory and The Takeout. The Moguldom article stated otherwise.
Advertising spending on digital media websites is down 33 percent as a result of the covid-19 pandemic, and no ads mean media cuts are inevitable.
Companies that used to spend billions on advertising will only be spending a fraction in 2020. Travel industry giant Expedia, for example, typically spends $5 billion on ads but probably “won’t spend $1 billion” this year, according to its chairman Barry Diller, CNBC reported.
Expect advertising budgets to drop even more during this crisis than they did during the 2008-09 financial crisis, according to an Interactive Advertising Bureau survey.
Some 390 media buyers, media planners, and brand executives were queried about their U.S. advertising plans for the rest of 2020.
Nearly 25 percent reported pausing all advertising spending through the second quarter. Another 46 percent are reducing their budgets, Barons reported.
Forty-four percent said they believed the impact of the current slowdown will be “substantially” worse than in the 2008-2009 crisis. Thirty percent said it will be “somewhat” worse.
Steep spending reductions are predicted in every category, including digital display, video and audio, linear TV, terrestrial radio, print, out-of-home, and direct mail.
This is bad news for newspapers, magazines, TV and radio station operators, billboard owners, and ad-supported web services.
As a result of shrinking ad budgets, one digital media outlet after another has announced staff layoffs and other cost-cutting measures. Here are seven digital media companies laying off employees due to the coronavirus crisis.
BuzzFeed hasn’t made just one set of coronavirus-related staff cuts. It recently announced its third. The company furloughed 68 people on May 6 and before that, it made cuts in late March.
The latest cuts involved the furloughs of 19 staffers by newly hired Editor-in-Chief Mark Schoofs.
Schoofs furloughed four people in the U.S. including BuzzFeed’s Washington, D.C., bureau chief and the site’s creative director. It also furloughed 10 journalists in London and five in Australia.
“The cutbacks come as BuzzFeed boss Jonah Peretti scrambles to keep coronavirus-induced losses under $20 million this year,” The New York Post reported.
Quartz is set to lay off 80 employees. This means nearly half the employees at the international business news site will no longer have a job. Due to the ad crisis brought on by the covid-19 pandemic, the 8-year-old outlet said it will shift its focus from relying on advertising revenue to paid subscriptions. The business news site has offices around the world and is owned by the Japanese financial intelligence firm Uzabase.
According to Uzabase, about 40 percent of Quartz’s 188 employees will lose their jobs, with the cuts focused on the advertising department.
In a note to staff members, CEO Zach Seward said about 80 roles would be eliminated. Additionally, Quartz will cut costs by closing physical offices in London, San Francisco, Hong Kong, and Washington and by reducing executive salaries by 25-to-50 percent, The New York Times reported. There was an earlier shakeup in October when Kevin Delaney, the founding editor, stepped down.
Vox will soon be announcing the furloughing of about 100 employees, according to sources.
Vox Media, which owns SBNation, New York Media, The Verge, and other digital media brands, is working out the details with the Writers Guild of America, East, which represents about 350 people at Vox, CNBC reported.
The furloughs will reportedly be for three months and will focus on employees whose coverage areas have decreased during coronavirus quarantines, sources said. Vox is also considering three-month employee pay cuts aimed at the company’s highest earners.
On the upside, Vox apparently wants to ensure health care is covered for furloughed employees.
“Vox agreed to acquire New York Media, which owns New York Magazine, last year. New York Media employees are unionized through NewsGuild, which hasn’t yet agreed to a contract with Vox since the acquisition’s completion,” CNBC reported.
In a fundraising effort, Vox is asking for reader contributions during quarantines to “enable Vox to continue bringing you essential information — for free — at the pace and scale the coronavirus crisis demands.”
Popular sites The Dodo, PopSugar, and Thrillist are all owned by Group Nine Media, one of the nation’s five biggest digital publishers. Group Nine will be slashing 7 percent of its staff (more than 50 employees) across the board, The New York Post reported.
Group Nine Media has more than 700 employees.
This will mark the second wave of cuts for Group Nine, whose CEO, Ben Lerer, announced recently he would forgo pay for six months and cut executives’ compensation by 25 percent.
On top of the job cuts, the company also suspended its 401(k) contributions “until further notice” and said it would skip all non-mandatory pay increases. It has canceled its summer internship program for 2020 and put a freeze on hiring.
Bustle Digital Group (BDG) has laid off around 5 percent of its staff. This equals 24 staffers, including all of those dedicated to The Outline, the digital culture site BDG acquired in 2019. BDG has more than 300 employees.
The Outline will cease publishing. Its staff includes five full-time employees and two part-time staffers.
Other layoffs included Bustle’s deputy features editor. Bustle’s lifestyle division was impacted by the layoffs. There is still more cost-cutting ahead. “All BDG employees earning over $70,000 will receive a temporary 18-percent decrease in their annual salary…Executives will be taking a cut 30 percent and CEO Bryan Goldberg is reducing his salary by 85 percent. There weren’t any deductions to benefits,” Digiday reported.
A whopping 155 jobs have been slashed by Brooklyn, NY-based Vice Media Group, which includes Refinery29. This accounts for more than 5 percent of Vice’s total worldwide staff.
Most of the cuts — (around 100 representing about two-thirds of the staff cuts) — will be international. In the U.S. there will be 55 layoffs, Vice Media Group CEO Nancy Dubuc wrote in an internal memo obtained by Variety.
The memo was titled “The Course Ahead,” and in it, Dubuc wrote, “While losing even one job feels like too many, these decisions ultimately rest with me and I assure you that we went to great lengths to preserve jobs.”
Right now, the company’s digital division accounts for 50 percent of staff costs, “but only brings in about 21 percent of our revenue,” Dubuc wrote in the memo. “Looking at our business holistically, this imbalance needed to be addressed for the long-term health of our company.”
Vice Media will retain about 90 percent of the jobs in the digital organization by making these cuts, Variety reported.
Vice’s cost-cutting moves started in March and included a sliding scale of pay cuts for employees earning $100,000 or more; a temporary suspension on promotions; and a halt on company-matched 401(k) contributions.
Vice Media staff who are being let go will receive severance pay and “everyone will be able to keep their work-issued laptops” as well as receive outplacement services, Dubuc said in the memo. In the U.S., laid-off employees will have health benefits coverage through the end of 2020.
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Initially, Jim Spanfeller, CEO of the newly formed G/O Media, said he didn’t expect layoffs at the company. But on April 3, the company cut 13 employees, which represents about 3 percent of 400-person staff.
Among the job cuts were those higher up in the masthead, including Susie Banikarim, formerly editorial director of Gizmodo Media Group (who Univision hired in 2017); executive managing editor Alex Dickinson; and special projects editor Tim Marchman, The Daily Beast reported.
G/O Media brands include The Root, Gizmodo, Jalopnik, Jezebel, Deadspin, Lifehacker, Kotaku, The Onion, AV Club, The Inventory and The Takeout.
