Nieman Foundation at Harvard
People are using Facebook and Instagram as search engines. During a pandemic, that’s dangerous.
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Feb. 1, 2019, 11:20 a.m.
Business Models

Another sign things are really dire: Vice is trimming 10 percent of its workforce, around 250 people, the Hollywood Reporter first reported.

It’s a smaller percentage of the workforce than the 15 percent BuzzFeed started cutting last week, but each company let go more than 200 employees. As of November, Vice had reportedly been on track to bring in between $600 million and $650 million in revenue in 2018 (double BuzzFeed’s amount), but THR says investors are becoming “antsy for the company to find a buyer.” (BuzzFeed’s Jonah Peretti has floated a merger between the handful of digital media contemporaries, but that consolidation would likely ultimately result in more layoffs.)

Nancy Dubuc, who took over as CEO from founder Shane Smith in May, attributed the cuts to a shifting focus of “executing our goals and hitting our marks” in a memo to staff Friday morning. Investors have poured more than $1 billion into the 25-year-old company, which is valued at infamously high $5.7 billion. All departments, from IT to television, will suffer losses, and Vice will attempt to globally restructure with regional focuses along its five lines of business (studios, news, digital, TV, and its in-house advertising agency), according to the Wall Street Journal. The weekly HBO show “Vice” will end, but the daily news show goes on.

Vice has also been in the midst of a hiring freeze but locked in the layoff plan while finalizing the strategic plan for the year. Instead Dubuc will focus on revenue drivers like the ad agency, the digital news desk, and the studios division. The Hollywood Reporter’s Natalie Jarvey reports that only 20 percent of Vice’s business is digital and the company is aiming for 15 percent revenue growth.

But still, oof. The industry was reeling from 1,000 cuts last week from BuzzFeed, HuffPost, and Gannett; now 250 more jobs (though not all journalists) are added to the pile. My colleague Laura Hazard Owen wrote at the time (just last week, but it feels like forever in layoff tweets):

The scariest thing this time around is that it’s not easy to pinpoint what exactly BuzzFeed did wrong. Yes, it seems to have hit a limit for how far a strategy reliant on native advertising and social distribution can go — but it’s also adjusted, trying to build revenue streams out of programmatic advertising, merchandising, and yes, that membership play.

The news side sprung out of BuzzFeed’s virality, and Vice wasn’t purely a news media company either. “We are fortunate that Vice’s early diversification has made us more resilient to a shifting industry,” Dubuc wrote in the staff memo. But its pivot to video in July 2017, partly a result of $450 million invested by private equity firm TPG, resulted in 60 layoffs, or around 2 percent of staff. The staff recently unionized, so those affected will get 10 weeks of severance and paid-out PTO (BuzzFeed’s leadership had a bit of an issue with that).

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