Friday, January 25
I am laid off. I put up my little lay-off tweet and watch my mentions, inbox, private messages, and WhatsApp go straight to hell. Mostly people are very nice, and send their well wishes and job suggestions. Some people online tell me that I couldn’t have been good at my job because I got laid off. I think, but do not respond, that many good people on our news team lost their jobs. I think, but do not respond, that a part of me agrees with these trolls. The whole DC bureau leaves and gets lunch and drinks.
Media layoffs, again. No surprise there, but this time time it was the online media folks who lost their jobs.
Buzzfeed recently cut 15 percent of its workforce, totaling about 250 employees. This is after a year where the company “basically hit” its revenue target of $300 million. The Wall Street Journal reported BuzzFeed Chief Executive Jonah Peretti said the company's layoffs would cut operating costs "so that we can thrive and control our own destiny, without ever needing to raise funding again."
Verizon Media Group which contains AOL, Yahoo, TechCrunch and HuffPost shed 800 jobs, seven percent of its media workforce.
Vice, Vox Media and Mashable have also announced layoffs in the last 12 months.
The problem, says Katie Herzog of the Stranger, is the double whammy of the crunch of online advertising dollars and poor business decisions.
In reality, the reason BuzzFeed laid off staff was simply that the business model is flawed. After Google and Facebook claimed the majority of online ad revenue, there wasn't enough left for everyone else. And it’s not hard to see why advertisers would flee traditional forms of advertising: Facebook and Google can precisely target ads based on the users’ interests, location, friends, etc. News organizations just don’t have that sort of data. (This was compounded by the fact that classifieds, which also used to be some 40 percent of media revenue, moved online to free sites like Craigslist in the late ‘90s and early 2000s.) The returns on banner ads were so low that BuzzFeed gave up on that model entirely, relying instead on native advertising, which is essentially ads designed to look like articles.
This doesn’t mean management should be let off the hook. Some new media companies tend to run their business less like newsrooms than they do startups. BuzzFeed, for instance, received over $500 million in venture capital by 2018. Half a billion dollars would keep local papers in business for eons, but BuzzFeed choose to locate their offices in the most expensive real estate markets in the country. This wasn’t necessary—nor were the free snacks and lunches—but it was a part of the brand. And it worked for a while. But the thing about taking venture capital is that venture capitalists want some return on their investment. When they don’t get it, lay offs commence.
I reported for nearly a decade, but only worked for a few established newspapers. I know about the economics of the industry, though, from a freelance perspective. These stories still surprise me when they happen. I can’t help but moralizing over this stuff.
The economic model for today's journalism seems to be a large part of the problem. Story after story about these layoffs showed that a year ago, these digital media companies were investors' darlings, promising fat returns. Good reporting takes a lot of time and doesn't bring a lot of revenue. And these venture capitalists are the first to push for cost cutting when the company goes throw a lean period.
But economic model talk misses the point, too. If journalism really is a public good and not just another facet of the economy, we need to ask what kind of journalism organizations we want. Do we want to rely on organs that are going to make big splashes and sell lots of advertising or whatever? Or, do we want to rely on something more cautious, more conservative where the values are placed in the work they do? It’s easy for us to say we’d pick the tortoise over the hare. But do we put our money where our heart lies? There’s always going to be flashy, high flying companies that promise riches to their investors. Maybe we shouldn’t be too surprised when they get burned.