Vice Media is to lay off 250 people in the latest blow to a new generation of media companies that rapidly expanded only to run into an uncertain advertising environment.
The cuts will affect 10 percent of its staff and come after a tough few weeks for news organizations, which brought job losses for journalists at BuzzFeed, Huffington Post and Gannett, the newspaper publisher that owns USA Today.
Nancy Dubuc, Vice’s chief executive, announced the news in an email to 2,500 staffers, describing it as a “strategic restructure”. The cuts will be spread across the company’s global operations and come as Vice reorganizes itself around its different divisions, such as its creative agency and studios business, rather than on a regional basis. “We’ve had to make hard but necessary operating decisions,” said Ms Dubuc.
She added in the note that Vice needed to “operate more nimbly, focusing our energies and investments on core strengths”.
Vice is more diversified than digital players such as BuzzFeed and Huffington Post: it has a deal with HBO, the premium cable channel, to produce a news programme and has distribution deals for its video content with international pay-TV companies and telecoms operators. Its Fyre documentary on a 2017 music festival in the Bahamas which descended into chaos is currently showing on Netflix.
However, the company’s growth has spluttered after successive funding rounds that led to its valuation soaring. Investors such as Walt Disney and TPG were among those putting money into the group. TPG’s investment in June 2017 valued Vice at USD 5.7bn.
Yet after expanding aggressively, Vice missed revenue targets by $100m in 2017 because of weaknesses at Viceland, the cable channel it set up in partnership with A+E Networks, and its digital video operation. Disney last year wrote down the value of its own USD 400m investment by USD 157m.
Vice started life as an anarchic magazine based in Canada. After moving to Brooklyn in New York, it evolved into a multi-platform media group with international television channels, a hefty online video presence and marketing and branding services.
Dubuc, A+E’s former chief executive, succeeded co-founder Shane Smith as chief executive last year. Smith has stayed with the company and is now the company’s executive chairman.
The cuts come a week after BuzzFeed began laying off 15 percent of its staff — more than 200 jobs — reflecting a deteriorating climate for online publishers that has already claimed several victims.
Jonah Peretti, its founder and chief executive, told BuzzFeed staff in an email that the cuts would put the company on “a firm foundation”.
Peretti recently floated the idea of a merger between BuzzFeed and another publisher, telling the New York Times that it made sense for five or six of the largest players in the space to merge.Peretti said there would be safety in scale, mentioning Vice, Vox Media, Group Nine and Refinery29 as companies that were doing “interesting work”.―Financial Times