Quartz, an English-language digital media outlet that primarily reports international business news, is the latest online publication to undergo layoffs due to the economic slowdown caused by the coronavirus pandemic.
“Uzabase has made a decision to accelerate efforts to reorganize Quartz’s business and to eliminate any potential future risks at an early stage, which will involve a shift towards a leaner structure through a fundamental business reform focused on restructuring the advertising business (approximately 40% headcount reduction),” according to the notice. Quartz reportedly had 188 employees at the end of last year. The restructuring will result in 80 employee layoffs at Quartz, The New York Times reported.
Amid a lag in business activities due to the Covid-19 crisis, advertising expenditures have taken a toll at Quartz. As of the first quarter of 2020, net ad sales significantly dropped by 54.1% on a year-on-year basis.
Media organizations turned to other cost-cutting measures to avoid layoffs in the early days of the pandemic taking hold in the U.S., in the form of furloughs or temporary pay cuts. Neither of those were an option at Quartz, its CEO Zach Seward told employees in a memo obtained by Adweek.
“They would not have saved enough money or corrected our business model in the long run,” Seward said. Laid-off employees will receive severance pay and can keep their laptops for up to six months.
Seward will take half his salary, and the rest of the executive team will voluntarily cut their salaries by 20%. Quartz offices in London, San Francisco, Hong Kong and Washington, D.C., will be closed, but the company will continue to employ people in those cities and beyond.
Despite the cuts, Quartz claims its subscription business, a trend other publishers are seeing, is growing amid Covid-19. At the end of April, the number of paid subscribers rose to 17,680, Seward said.
Quartz is one of several digital platforms that has gone through a round of layoffs. Earlier this week, Condé Nast laid off just under 100 of its U.S. employees. Though media organizations across the board have seen a surge of traffic over coronavirus coverage, by the end of Q1 in April, CQ Roll Call, Bustle Digital Group, G/O Media, Group Nine Media, Vox Media, Tribune Publishing and BuzzFed had all either laid off, furloughed or implemented temporary pay cuts for employees.