Quartz Fires Nearly Half Of Its Journalists, Blames COVID For Failure Of Subscription Strategy

Tyler Durden's Photo
by Tyler Durden
Thursday, May 14, 2020 - 03:00 PM

Quartz, once a pioneering and extremely trendy source for business and economic news that produced several journalist blue-check super-stars who have mostly since moved on to different outlets as the company became increasingly irrelevant after adopting a paywall, is planning to lay off 80 employees in the latest round of journalism job cuts.

The news, which comes after Buzzfeed furloughed dozens of employees and cut pay, while Wired also laid off a bunch of staff, is the latest blow to the digital news model that cropped up around the time of the last crisis, where a new wave of VC-backed "digitally native" sites like Buzzfeed and Quartz, which mixed news, opinion and "analysis" to produce a cheaply made product that failed to inspire enough readers to pay up for a premium edition.

The New York Times reported that the cuts are equivalent to 40% the company's staff. It also noted that Quartz has offices "all around the world." According to the report, Quartz, which has struggled to switch over to a subscription-based model from an advertising-based model, has fewer than 18,000 paying subscribers, meaning the company is probably only pulling in a few million dollars a year in revenue from subscriptions, hardly enough to sustain a newsroom.

Quartz’s owner, the Japanese financial intelligence firm Uzabase, announced the layoffs in a public filing Thursday. The company said that approximately 40 percent of Quartz staff members would lose their jobs, with the cuts focused on the advertising department. Quartz had 188 employees at the end of last year, Uzabase said.

The site's EIC, who hasn't tweeted since Tuesday, told the NYT that the layoffs were part of a plan to pivot, and also blamed them on the coronavirus, which he said dramatically cut into the company's advertising take.

Zach Seward, the chief executive, said in a note to the staff that approximately 80 roles would be eliminated. A spokesman for the NewsGuild, which represents 43 journalists working at Quartz, said on Thursday that about half its members would lose their jobs.

Quartz is also trying to cut costs by closing physical offices in London, San Francisco, Hong Kong and Washington and by reducing executive salaries by 25 to 50 percent, according to the note.

Mr. Seward said the cuts were part of a strategy to make Quartz profitable by emphasizing subscriptions over advertising.

The site started charging readers for articles in 2018, shortly after Uzabase bought it from Atlantic Media, which founded Quartz in 2012. Many news sites have installed pay walls in recent years as the game plan of offering free content supported by advertising has begun to seem less tenable.

“Our strategy is to focus on what Quartz does best, which is analysis of global business and economics for our audience of young, ambitious professionals,” Mr. Seward said in his note to the staff. “The business model will still be a mix of subscription and advertising revenue, but as a smaller and more focused company, we’ll only do those things that serve Quartz’s core.”

The number of paid subscribers rose to 17,680 at the end of April, Mr. Seward added.

While the coronavirus has hammered many companies and many industries, several media companies have now blamed the virus as an excuse for cutting back staff or making other cuts in operational spending - but we suspect that's not the full story.

As the company has previously claimed, it's transition away from advertising started years ago. By now, if the owners at Uzabase who decided to buy Quartz away from the Atlantic had succeeded in their transition plan, Quartz wouldn't be so reliant on advertising revenue growth to sustain its business. And the article - notably - says nothing about cancelled subscriptions, or a slowing in subscription growth.

Plus, data on ad spending by industry suggests that many of the biggest companies to say they're cutting ad spending either haven't yet, or no longer plan to.

It's just the latest sign that sites like Quartz, which cater to young, urban professionals, just aren't appealing to a broad enough range of readers. We wonder why that is...

Apparently, the Quartz union was powerless to stop the savage cutbacks - just the latest example of how little the 'newsroom unionization movement' has actually accomplished.

Maybe all the laid-off blue checks from Quartz, Buzzfeed, Deadspin and all the other digital news sites that are hemorrhaging 'content writers' with no real reporting or writing chops but like 8k+ twitter followers.

Adding insult to injury, the Atlantic signed up some 36,000 new subscribers in March alone, and has been building its subscriber base at a rapid clip. Maybe some of these laid off Quartz writers can ring up some of their old colleagues.