Coronavirus: VICE and The Economist announce job cuts as media industry continues to take battering from pandemic

Advertising revenues have plummeted amid economic downturn caused by Covid-19

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VICE Media and The Economist rounded off a grim week for the media industry on Friday by announcing job cuts in the US, UK and internationally.

The news came just days after similar cuts at Buzzfeed and Quartz, as an economic downturn caused by the coronavirus continued to negatively impact advertising revenues.

VICE Media Group CEO Nancy Dubuc told staff in an internal memo that the company was cutting 55 jobs in the US and 100 globally, mostly to its digital operations.

“The reality is that some tough decisions had to be made primarily around our digital teams,” she wrote in the memo, in which she said big tech companies posed a “great threat to journalism”.

“Currently, our digital organisation accounts for around 50 percent of our headcount costs, but only brings in about 21 percent of our revenue. Looking at our business holistically, this imbalance needs to be addressed for the long-term health of our company,” she added.

Many media companies have witnessed huge spikes in traffic during the coronavirus outbreak, as readers flock to consume news about the pandemic. At the same time, the economic downturn caused by lockdown measures across the world has drastically reduced advertising spending. Forecasts for global advertising growth this year have been revised down by $20 billion since mid-March, according to market research firm eMarketer.

Also on Friday, the Economist Group announced that it was laying off 90 employees, around 7 percent of its total workforce, to address the drop in revenues caused by the Covid-19 pandemic. The cuts were made to the company’s events and client solutions divisions, while its bi-monthly lifestyle magazine 1843 is to become digital-only.

“We have made the difficult decision to restructure and reduce roles in the parts of our business most affected by COVID-19,” the company said in a statement provided to Folio. “Each one of our departing colleagues has been instrumental in helping us build the business we have today and leaves with our heartfelt thanks and our promise to build on the legacy they leave behind.”

The cuts at VICE and The Economist round off a week of cutbacks at global media organisations. Buzzfeed announced on Wednesday that it was closing its UK and Australian local news operations, with 15 editorial staff being cut in both newsrooms. The company also said it would furlough 68 employees who worked on the business side of its operations and implement salary cuts.

Other cutbacks have been announced at the LA Times, Quartz, Vox Media and Conde Nast.

UK media outlets have not been spared from the downturn either. The Independent recently announced furloughs and a 20 per cent pay cut for staff earning over £37,500. The Guardian furloughed 100 staff in affected departments last month and launched a voluntary reduced-hours initiative. The Telegraph, meanwhile, furloughed around 90 employees, while non-editorial staff were given a 20 percent pay cut in return for working one less day a week.