Following in the footsteps of Quartz, Buzzfeed, Wired and other struggling media companies using the virus as an excuse to make deep cuts, Vice Media is reportedly planning to fire 155 employees, the Wrap reports.
It has been obvious for more than 16 months now - ever since Buzzfeed laid off 15% of its staff early last year after reporting sales growth was far below investor projections, prompting most of its backers to write down the value of their investments and push the company to retool its flailing business strategy. Meanwhile, reports by rival media companies found that Buzzfeed's staff of highly paid journalists (who recently formed "union" to ensure they could protect themselves from a management team that has overvalued their talents at every turn) produced laughably little traffic. In fact, Buzzfeed's biggest traffic-producer was an unpaid teenager from Michigan.
Pictured above: A former Vice staffer who described the company's workplace as a sexual-harassment infested snakepit to the NYT
But we digress. Like Buzzfeed, Vice relied on a similarly vague digital strategy that relied on overly optimistic projections for ad revenue growth that at one point led investors to value Vice - then privately held - at a high of $5.7 billion. But unlike Buzzfeed, Vice is staffed by a handful of star reporters and a legion of poorly paid grunts who produce clickbait content with little analysis, substance or value.
Though the company blamed the layoffs on the crisis, Vice warned during its last round of layoffs that deeper cuts to its international operation were likely to come. Late last month, WSJ reported that Vice was planning to lay off 300 employees, which would account for somewhere between 10% and 20% of its total staff.
Here's more from Variety.
“While I often have to talk about ‘the business,’ we all know that VICE Media Group is so much more than just a business. It’s our community. It’s our voice. It’s a reason to remain resolutely hopeful in this time,” Dubuc said in the memo.
She wrote that by eliminating open roles and reassigning existing staffers to the “growing news division” that will give global sites a separate “Vice World News Section,” the company was “able to preserve approximately 90% of the roles in the digital organization."
"The reality is that some tough decisions had to be made primarily around our digital teams," Dubuc wrote.
"Currently, our digital organization accounts for around 50% of our headcount costs, but only brings in about 21% of our revenue. Looking at our business holistically, this imbalance needed to be addressed for the long-term health of our company."
In April, Vice pushed back on a Wall Street Journal report citing leaked documents that suggested the company would see 300 layoffs in the coming weeks. At the end of March, Vice cut salaries for some employees, shortened employee workweeks and halted 401k contributions as the coronavirus pandemic ravaged the American economy and, thus, digital advertising revenue.
While roughly 2/3rds of those who are being laid off work oversees, some 50 journalists and other staff in the US will also get pink slips. Fortunately, since Vice pays its employees notoriously poorly, most of them are privileged middle-class kids with family money to fall back on. Otherwise, they never would have been able to take a job paying $38k/yr while living in Brooklyn.
Most of Vice's backers, including Disney, have already written down the value of their stakes.