Bustle Digital Group Makes Staff Cuts Due to Coronavirus
It's also halting production on The Outline
Key insights:
- The effects of coronavirus are expected to impact BDG in the "tens of millions of dollars."
- About 6% of employees were laid off.
- Employees still with the company who make more than $70K will take a tiered pay cut.
Bustle Digital Group laid off two dozen staffers, ceased operating a publication and announced widespread pay cuts today, as the effects of the coronavirus continues to make its way through the media industry.
Out of approximately 300 employees at BDG, 24 people were laid off across sectors of the company, including editorial, sales, video and events as well as staffers working on The Outline, a company it acquired last year, and that executives are now “halting operations” on.
Like all industries operating in the shadow of the coronavirus, the impact came swiftly as it destroyed companies’ events businesses and advertising revenues.
In a memo to staff members, BDG founder and CEO Bryan Goldberg said that the business damage due to COVID-19 would “likely be measured in tens of millions of dollars. As a result, the executive team has come to a difficult but necessary action plan on how to decisively address this loss.”
That plan, effective April 16, includes giving employees making more than $70,000 a temporary 18% pay cut, executives will see a 30% pay cut and Goldberg is taking an 85% pay cut to his own salary. Goldberg said in the memo that there is no end date to the temporary pay cuts, and that “the timing of the economic recovery is uncertain, but I know that by making these hard decisions today, our company’s future is secure.”
“We have every reason to be assured in our ability to persevere, and I am confident that we won’t have to make further changes,” he said.
Goldberg has constructed a broader media portfolio by acquiring and piecing together smaller publications and media companies on the brink of financial ruin. The portfolio has included publications like Bustle, Elite Daily, Inverse, Mic, Nylon, Romper, The Outline and The Zoe Report.
At the beginning of this year, BDG created its own tech site, Input, under the direction of Josh Topolsky, a co-founder of The Verge, who came on board to BDG when it acquired his site, The Outline. Input introduced a new advertising concept for BDG called branded content cards that BDG execs planned to roll out on all other publications and put all media properties on the same content management system by June.
With the new CMS, BDG execs wanted to grow certain ad categories, like consumer electronics, telecom, financial services and automotive, this year from the 10% it accounted for to at least a third. Top advertising categories for BDG have traditionally been retail, fashion and entertainment.
Topolsky is staying on at BDG and will continue to oversee Input, Inverse and Mic. BDG will continue to host The Outline’s archives and publication. There aren’t current plans to sell the property, but Topolsky “will be exploring alternative paths forward for the publication’s future,” a spokesperson said.
BDG entered this year, after closing 2019 with three newly-acquired companies and an archive of work at Gawker.com that executives said would relaunch before they changed their minds and later laid off at least a dozen staffers. It ended FY 2018 with an estimated $75 million in revenue.
The impact media businesses, as all industries, have seen from the coronavirus have been quick. Alt-weeklies and local publications, ultra dependent on local ad dollars, were the first sector of the media industry to see deep cuts, including at publishers like Euclid Media Group, which owns alt-weeklies in five states.
Many media companies, including BuzzFeed, Vice and Gannett, have handed down pay cuts as opposed to layoffs as a last-ditch effort to preserve staffers in a bet that business returns as quickly as it dried up later this year.
Advertising forecasts for the rest of this year are grim, according to the latest forecast from IPG Mediabrands-owned Magna Global. Instead of growing by nearly 7%, full-year ad sales, across all media, is expected to decrease by 2.8%
