Vice Media CEO Nancy Dubuc announced today that the media company will lay off 155 employees, starting with 55 staffers in the U.S. today and 100 more international employees in the coming weeks.
In a letter to staff, Dubuc reportedly noted the economic hardships for the media business, which have been even more pronounced amid the Covid-19 pandemic. “The reality is that some tough decisions had to be made primarily around our digital teams. Currently, our digital organization accounts for around 50% of our headcount costs, but only brings in about 21% of our revenue.”
She said Vice will cut 10% of its digital staff, and more employees will be moved to its “growing news division.”
By the end of March, as the pandemic began to take hold in the U.S., the news organization had begun instituting pay cuts and stopped contributing 401K matches in an attempt to save money and avoid layoffs.
Dubuc said the pandemic has “intensified tensions between publishing and advertising,” and blamed tech platforms such as Google for much of the news industry’s financial struggles. “We aren’t seeing the return from the platforms benefitting and making money from our hard work,” Dubuc wrote. “Now, after many years of this, the squeeze is becoming a chokehold. Platforms are not just taking a larger slice of the pie, but almost the whole pie.”
Total ad revenues for Google’s parent company, Alphabet, for example, reached $33.8 billion in Q1.
In a statement following the layoffs, Vice’s union refuted Dubuc’s claim that she and other executives did “absolutely everything we could to protect these positions for as long as possible,” claiming she refused to discuss workshare programs like the one The Los Angeles Times recently instituted.
“Vice also did not agree to make further cuts to executive compensation before laying off 100 employees,” according to the union. A spokesperson for Vice did not immediately respond to a request for comment.
Dubuc said in her letter that all affected employees would receive severance pay, can keep their work-issued laptop, and would receive outplacement services. Laid off U.S. employees will receive extended health benefits through the end of 2020, and Vice is creating an alumni group so that those affected can get “first-look access” to open jobs when they are available.
Vice’s layoffs come on the heels of many other media companies that have done the same in recent weeks. This week alone, digital news publisher Quartz fired 80 employees, Conde Nast laid off 200 staffers, and BuzzFeed News shut down its U.K. and Australia operations.
Additional media companies that have mass-fired employees recently include ViacomCBS, Protocol, G/O Media, Verizon Media, CQ Roll Call, and Bustle Digital Group. Many other companies have instituted pay cuts, furloughs and reduced hours in order to try and avoid layoffs. Some smaller media companies have reported receiving Paycheck Protection Program assistance through the U.S. Small Business Administration.
Amid the Covid-19 pandemic, news publishers have struggled immensely due to declining advertising spend and an inability to convert traffic surges from the pandemic. Advertisers spending less and keyword blacklisting allows buyers to avoid coronavirus-related content entirely. Additionally, many publishers have made their Covid-19 coverage free for readers due to the vital need for reliable information on the evolving crisis.
Many outlets are doubling down on subscription models, but only the most prominent outlets—The New York Times, The Wall Street Journal and The Atlantic, to name a few—have reported seeing much success on that front. For an industry that’s already wounded, the path forward looks even more daunting.