Vox Media, the parent to media brands like The Verge, SB Nation and New York magazine, announced companywide staff changes that furloughed 9%—or roughly 110—of its employees.
The effects of Covid-19 on the business were laid out to staffers in a lengthy note this morning from the company’s chief executive, Jim Bankoff. The company missed its revenue goals by several million dollars in the first quarter and “the impact will be significantly greater in the second quarter,” he wrote in a memo obtained by Adweek.
“Some of you have asked if we could have avoided furloughs or layoffs by sharing deeper or longer salary cuts. The answer, unfortunately, is no,” Bankoff said in the note sent to the company’s 1,200 employees.
The company will continue to fully cover the health insurance premiums for those furloughed from May 1 to July 31.
In addition, 1% of staff will move to reduced hours, with health insurance premiums covered, and employees making more than $130,000 will see a tiered temporary pay cut for the same period. Specifically, employees who earn between $130,000 and $199,999 will take a 15% pay cut, and those earning more than $200,000 will see a 25% reduction.
Bankoff and Pam Wasserstein, formerly CEO of New York Media and current president of Vox Media after the companies merged, will take a 50% pay cut.
The company’s 401k match and merit-based increases and promotions will also be suspended through the rest of this year.
Vox Media’s announcement comes weeks after other media organizations have made similar decisions to react to the effects Covid-19 has had on their businesses, namely the decline in advertising revenue as marketing budgets changed, the inability to hold in-person events that had become a moneymaker in recent years for publishers and, most recently, Amazon’s changes to the amount websites would make in affiliate links, which will put a strain on websites designed to recommend products, like Vox Media’s The Strategist.
Other media companies have tried to determine their own formula to survive the next weeks to months of uncertainty and have resulted in permanent layoffs at companies like Bustle Digital Group (which laid off about 6% of employees) and widespread pay cuts throughout the industry.
Vox Media merged with New York Media in November last year, and 2020 was expected to be a year where the combined portfolios were able to attract more advertisers at their new scale. They also planned to take on the year with proprietary technology using its ad marketplace, Concert, and with a renewed emphasis on its meaningful first-party data in a platform called Forte.
Spokespersons for Writers Guild of America, East, which represents unionized Vox Media employees and the NewsGuild of New York, which represents New York media employees, didn’t immediately return requests for comment.
“The expectations that we had just a few weeks ago for our business and our lives no longer apply,” Bankoff said. “I’m confident that we will have a bright future, but only if we take action and adapt quickly to new circumstances. As I mentioned last week, we cannot continue with business as usual; we must focus our efforts and operate differently.”