The new year began with a bloodbath for media outlets, as the Los Angeles Times, Forbes, Sports Illustrated, Pitchfork, Forbes, NBC News, Time Magazine and Business Insider all cut editorial staffers in shocking numbers in less than a month.
The layoffs this week alone have ranged from the 3% announced on Thursday by Forbes and 8% at Business Insider to a staggering 120 positions — more than a 20% of the newsroom — axed at the LA Times between Tuesday and Wednesday. That move, following a historic walkout by the LA Times Guild, saw the publication showing the door to award-winning writers and photographers.
Over 400 Condé Nast staffers engaged in a similar demonstration on Tuesday in response to the cuts there.
So why all these layoffs at once? TheWrap took a look at several factors that led to the massive dismissals, including bitter clashes between owners and news guilds and the bleak state of media advertising.
Hot labor summer is over
After the Writers Guild of America and Screen Actors Guild successfully secured new contracts during 2023’s “hot labor summer,” many workers were inspired to launch their own movements for change — including those in the news guilds, which saw historic walks out and work stoppages. Unfortunately, those efforts may have only sped up the layoff process.
The LA Times’ one-day work stoppage on Jan. 19 infuriated billionaire owner Patrick Soon-Shiong, who said the action “did not help” already tense negotiations and cut short attempts to gain employee buyouts in order to avoid layoffs. When the boom was lowered on Tuesday, more than 115 people had been laid off, with reports of even more pink slips being issued that evening. A whopping 82% of the laid off staffers — 94 total — were guild members.
Meanwhile, former Sports Illustrated writer Jessica Smetana, who helped form the outlet’s union in 2020, tore into her employer’s decision to eliminate the entire SI editorial team on Tuesday, calling it “calculated union-busting.”
The Hollywood laborer-studio power dynamic may have worked in favor of actors and screenwriters last year, but editorial staffers are increasingly seen by upper management as eminently replaceable in 2024.
“Journalists are striking across the country in response to runaway greed at news organizations that have enough money to fund journalism,” Jon Schleuss, president of the NewsGuild-CWA, told TheWrap.
“We don’t see executives cutting their extravagant salaries or news companies slowing down dividend payouts,” he said. “The news-owner greed is destroying our democracy, which depends on trustworthy news produced by hard-working journalists.”
But in some cases, newspapers owners are just tired of losing money. Soon-Shiong said he has lost $30-40 million annually since buying the LA Times in 2018.
Some outlets that had organized work stoppages, like New York Daily News, were a reaction to sweeping layoffs that had already been announced. Journalists from six newsrooms have held strikes in the last seven days, including from the LA Times, Pittsburgh Post-Gazette, Condé Nast, San Antonio Report, New York Daily News and Forbes, Schleuss said in a tweet in X on Thursday.
Shrinking job opportunities in journalism
“In many ways, we’re simply seeing a continuation of long-term trends of print news media losing significant money, which translates to mass layoffs of news workers,” Victor Pickard, a professor of media policy and political economy at the University of Pennsylvania’s Annenberg School for Communication told TheWrap.
In 2023, broadcast, print and digital outlets collectively cut 2,681 journalism jobs, up 48% from 2022 and 77% from 2021.
“But these particular cuts — especially those at the LA Times and at The Washington Post — stand out not only because they are so severe, but also because they call into question the ‘benevolent billionaire’ model for saving journalism,” Pickard added.
“It’s just harder and harder for news organizations to be profitable,” Laura Castaneda, associate dean at USC’s Annenberg School for Communication and Journalism, told TheWrap. “People will tell me, ‘I just saw ProPublica say they have six openings.’ That’s great, but the LA Times just laid off more than 100 people. So yeah, six is kind of a drop in the bucket.”
Outlets are no longer afraid to make deep cuts
Making cuts during the height of the COVID-19 pandemic would have been bad optics, but the layoffs simply couldn’t wait any longer, according to Soon-Shiong.
“It is indeed difficult to reflect upon the recent tumultuous years, during which our business faced significant challenges, including losses that surpassed $100 million in operational and capital expenses,” he was quoted as saying in The Times.
“Despite these difficulties, we made a deliberate decision to abstain from implementing layoffs within our newsroom during the COVID pandemic, maintaining the newsroom headcount throughout until the last several months, despite the losses.”
At Business Insider, staffers tied the timing of the layoffs to the end of a June 2023 moratorium to suspend cuts for the rest of the year.
Thursday’s news that 8% of Business Insider staffers would be eliminated came “not even a month after our layoff moratorium expired,” Insider Union unit chair and senior copy editor Emma LeCault said in a statement. “It’s clear that management has been eager to lay more of us off.”
Advertising revenue is down and video platforms aren’t paying off
A significant factor driving media executives to trim their workforces is declining advertising revenue.
U.S. newspaper publishers are expected to lose $2.4 billion in advertising investment between 2021 and 2026, mostly related to less print advertising, according to a 2022 report from the consulting firm PwC.
Print advertising that fell to $7 billion in 2021 will drop to $4.9 billion by 2026, the consultancy said, with digital advertising growth only expected to increase by 1% in that same period — which is not enough to recoup overall lost ad revenue.
Print advertising has been diminished by digital opportunities, while tech companies like Alphabet and Meta have gobbled up the lion’s share of digital ad dollars.
The news-owner greed is destroying our democracy, which depends on trustworthy news produced by hard-working journalists.
Jon Schleuss, president of the NewsGuild-CWA
Of course, newspapers and magazines cannot live on subscribers alone. Gannett’s digital subscriptions grew 17% from 2022 to 2023, but advertising and marketing revenue was down nearly 8% for the same time period, Digiday reported last summer.
With continued weakness in the advertising market projected for 2024, decision makers are likely preparing for a financially difficult year by shaving costs at the start of the calendar year.
In November, Axios reported that publishers were not seeing the same ad gains as Big Tech. “Recent earnings reports from digital media companies show how weak the ad market has been for them,” the outlet said, citing a 35% decrease at BuzzFeed and decline of 12% at IAC’s Dotdash Meredith, which publishes several titles including People and Entertainment Weekly.
At the same time, media outlets have put social media-friendly and Gen Z-targeted video teams on the chopping block within the last year after they failed to become cash cows. The LA Times bid farewell to several senior editors, photographers and members of its video unit on Tuesday, while Yahoo and Condé Nast also shuttered their video teams over the past year. As Condé Nast CEO Roger Lynch noted in November, “these new video formats haven’t found monetization models yet.”
Longstanding economic uncertainty
Broader economic headwinds are also affecting the media industry. Inflation levels are still coming down from record highs that reduced consumers’ discretionary spending. And geopolitical tensions — with wars raging in two regions vital to the world’s supply of food and energy — are creating uncertainties in the global economy.
Although the U.S. economy did not slip into recession in 2023 — contrary to most analysts’ expectations — the likelihood of one in 2024 is still about 30%, compared with 15% in normal years, The Guardian noted at the top of this year.
And economic growth continues to be sluggish. “The global economy is set to rack up a sorry record by the end of 2024 — the slowest half-decade of GDP growth in 30 years,” the World Bank’s January 2024 Global Economic Prospects report stated.