Some of the largest, most reputable companies in the media industry today are experiencing massive layoffs amounting to more than 1,000 job cuts. The companies making cutbacks include the media division at Verizon, The Huffington Post, Yahoo, AOL, Buzzfeed, Vice and Gannett which owns USA Today, as well as local newspapers across the country.
BuzzFeed was the first company to announce its layoffs of 15 percent of its workforce, which amounts to over 200 job losses. According to NPR, BuzzFeed simply is not profitable and the shareholders are becoming increasingly apprehensive over the its plundering financial situation. Though BuzzFeed has tried to keep its head above water, they have been experiencing proliferating pressure from venture capitalists, who contribute hefty rounds of funding, to deliver positive results, according to CNN Business.
BuzzFeed’s co-founder and chief executive, Jonah Peretti, said that the company was restructuring to put it on a “firm foundation” to better adapt to the “evolving economics of digital platforms.”
Verizon Media Group later announced layoffs for eight percent of its companies, which accounts for more than 800 job losses. A Verizon Media spokesperson said that the layoffs are a “strategic step toward better execution of our plans for growth and innovation into the future.”
Gannett has been making cuts for several years now so their layoffs in the last couple of weeks have been less expected, but still significant. Gannett has decent revenue coming in from a lot of their newspapers, but the company is still getting smaller to maintain profit ratios.
In recent years, these media outlets have grappled to compete with mass media sites such as Google and Facebook for advertising revenue. Edmond Lee, a New York Times media consultant spoke about the layoffs in an interview with NPR where he said that, “the conceit around the Internet is it’s sort of vast and endless and all kinds of places to go. In reality, it’s really just Facebook and Google and sort of everyone else.”
This means that in terms of advertising revenue, Google and Facebook are accounting for the majority of this money, and that digital media companies like BuzzFeed are not getting as many dollars per viewer as they would otherwise. Lee comments on the fierce challenge that smaller media outlets face by stating that, “despite the good content that they create and the great journalism that they do, to attract those ad dollars [it must be]at least in a way that is sustainable for them going forward.”
A great deal of revenue loss, especially for print companies like Gannett, is also attributable to readers increasingly getting their media from the internet. These companies couldn’t compete with other digital media sites like HuffPost who posted instantly-available news, for free online. Certain established print publications, like The New York Times, have been able to adapt by adding paywalls to their websites, so that people still have instant access to news. However, smaller publications, such as those owned by Gannett, have not been able to adapt as easily.