What’s The News?With significant layoffs declared at Buzzfeed and HuffPost last week, Vice Media is the latest company to announce job cuts affecting 10% of its workforce. Click To Tweet
What Does This Mean?
2019 has started on a shaky note for the digital as well as legacy media industry. Established, and widely popular media publications are mercilessly culling their workforce, and the future looks bleak.
In an advertising world controlled by large internet companies, the reason given by media businesses for all the layoffs reason remains the same: Revenue slowdown, and decreased profits.
Dave Rubin from Rubin Reports, however, argues on this reason blatant reasoning of media companies. He argues that it is in fact “bad journalism that led to change in the economics of the business”.
Why Does It Matter?
The Bigger Market Picture: Vice Media was valued at mindboggling $5.7 billion in June 2017, when they received a funding of $450 million from a private equity investor. However, once Disney announced a write-down of $157 million investment into Vice last year, the valuation has slightly come down.
In a memo shared with all employees, Vice Media CEO Nancy Dubuc said, “To this end, we’ve had to make hard but necessary operating decisions. Starting today, the next phase of our plan begins as we reorganize our global workforce. Unfortunately, this means we will have to say goodbye to some of our Vice colleagues.”
This ‘corporate restructuring’ of Vice media will also bring in drastic changes to the entire management of the company: From a country-centric structure, Vice is now moving to divide itself into 5 business verticals, which are studios, news, digital, TV and in-house ad agency Virtue.
Vice has suffered a few major setbacks in the last few months, and it seems that this massive layoff was the only solution left.
Their weekly documentary on HBO was put off-air after 6 years and the revenues have stagnated between $600 to $650 million for the last two years.
In July 2017, Vice had terminated 2% of their then workforce of 3000 employees; and last year, they have had an entire hiring freeze.
The current round of layoffs involves Vice Media employees from the US, UK, and Mexico.
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