Media cuts weigh on industry morale
Over 500 people in the U.S. news media were laid off last week, indicating that many companies' initial efforts at the start of the pandemic to avoid job cuts, like reducing executive pay, weren't sufficient to protect their work forces.
Why it matters: Layoffs in bulk can deeply injure any organization's psyche — particularly in the situation where companies end up doing it more than once, which is why often execs are advised to cut deeply once rather than minimize a first round.
By the numbers: Layoffs at Vice (155 people), Quartz (80 people), The Economist (90 people), Condé Nast (100 people) and furloughs at Buzzfeed (68) and Condé Nast (another 100) were posted last week. Hundreds more are expected in coming months.
Between the lines: Startups and innovators lured talent and raised money under a "we are inventing the future of media" banner. But now they're shifting to survival mode and will need to find new ways to bolster morale.
- Of course, at a moment like this journalists who still have jobs are grateful to be employed. But seeing colleagues and friends get the axe can change their sense of identification with, and commitment to, their employers.
The big picture: Thousands of other jobs in the news media industry have been lost at the local and global levels. Student internships and fellowships have mostly been cancelled, hindering younger journalists from experience and exposure within the industry.
Our thought bubble: The digital era blew up the old business model of the news industry, and it has spent 25 years searching for a new one.
- But instead of finding a lasting solution, the industry took a long ride on a pendulum swinging between ad revenue and subscriptions income. It bet heavily on the first during flush times and rushed wildly to the second when recessions hit.
- Because the industry, now entering the third or fourth round of this cycle, doesn't seem able to change its behavior, that pendulum now feels like a wrecking ball.