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Digital media is in a crisis. Nearly every week, there is news of layoffs or complete shutdowns. And, these are not just smaller niche digital media outlets; even the majors are feeling the squeeze. Here are seven signs the digital media is in a crisis.
Last week, Snap Inc., the company behind Snapchat, Spectacles, and Bitmoji, witnessed a significant drop in its stock price, plummeting nearly a third following the release of its fourth-quarter results. The social media giant also announced plans to slash 10 percent of its global workforce as part of a restructuring effort aimed at streamlining operations and fostering enhanced collaboration, Benzinga reported.
“We are reorganizing our team to reduce hierarchy and promote in-person collaboration. We are focused on supporting our departing team members,” a Snap spokesperson told CNBC.
Snap wasn’t alone in facing layoffs. Industry giants like Meta Platforms, the parent company of Facebook and Instagram, and Alphabet, which owns Google and YouTube, also experienced downsizing within their ranks. This wave of layoffs underscores the challenges plaguing the digital media landscape.
BuzzFeed News announced it was ceasing operations as part of a strategic decision aimed at addressing financial challenges within the company. CEO Jonah Peretti conveyed this development in a memo to staff late last year, revealing plans to shut down BuzzFeed News and implement workforce reductions affecting approximately 15 percent of its employees, equating to around 180 individuals spanning various divisions, Futurism reported.
The Messenger, a digital news startup that emerged onto the scene with a substantial $50 million funding injection last May is now poised to halt its operations, as revealed by a source told Axios.
Despite the endeavors of CEO and founder Jimmy Finkelstein to secure supplementary funding aimed at extending the company’s sustainability for several additional months, sources disclosed to Axios that these efforts ultimately did not materialize into success.
G/O Media, the digital media company behind popular websites like Deadspin, Quartz, Kotaku, its African-American culture outlet The Root, and The Onion, has begun a major shake-up in its operations by putting several of its website properties up for sale. G/O Media, owned by private equity firm Great Hill Partners, has decided to sell off individual editorial assets within its portfolio. This marks a departure from its initial strategy of seeking a buyer for the entire collection of brands.
On Jan. 25 the Arena Group’s board convened following the company’s termination of its Sports Illustrated license. Defaulting on a $3.75 million quarterly payment earlier led to this decision, causing a significant drop in Arena’s stock and the complete layoff of Sports Illustrated’s staff, New York Magazine reported.
More than 3,000 editors, reporters, and journalism industry professionals have been laid off in the past year, Bloomberg reported. Time magazine slashed its staff by 15 percent, while Condé Nast, the publisher of iconic titles like Vogue and the New Yorker, let go of 5 percent of its workforce.
The future of Sports Illustrated hangs in the balance, and Forbes Media, where workers voted to unionize in 2021, announced intentions to trim 3 percent of its workforce amidst a three-day employee walkout recently.
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