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A new round of lay-offs is sweeping newsrooms as a combination of sagging advertising, reader fatigue with the headlines and fed-up billionaire owners brings brutal cost-cutting drives to titles from the Los Angeles Times to Time magazine.
Business Insider, the Axel Springer-owned financial news group currently in a fight with hedge fund boss Bill Ackman, was the latest publication to announce cuts on Thursday, affecting nearly a tenth of its workforce.
The dismissals came days after the Los Angeles Times, which was acquired for $500mn by biotech-billionaire Patrick Soon-Shiong in 2018, said it would axe more than a fifth of its newsroom.
Soon-Shiong made the cuts after enduring losses of $30mn to $40mn a year, according to the LA Times. The publisher was criticised for telling staff of the cuts over an HR zoom webinar.
The news industry has suffered declines for more than a decade as outlets have struggled to adapt to a digital world — with notable exceptions such as the New York Times, which has built a booming subscription business.
US newsroom employment dropped 26 per cent between 2008 and 2020, according to Pew Research Center. On average, 2.5 local US newspapers closed per week in 2023, Northwestern University researchers estimated.
News companies have been hit in recent months by ongoing weakness in the advertising market, as well as a drift in reader attention to social media platforms such as TikTok for their news.
Some publications, such as the Washington Post, have failed to maintain the momentum they gained during Donald Trump’s chaotic presidency. Chief executive Will Lewis has signalled he does not anticipate another “Trump bump” to the paper’s business.
The Washington Post, owned since 2013 by Amazon founder Jeff Bezos, late last year cut about 10 per cent of its staff through voluntary buyouts, telling employees that its subscription and advertising projections had been “overly optimistic”.
The cuts at the Washington Post and the Los Angeles Times signal that even billionaires — who have at times been viewed as potential saviours to beleaguered news groups — will not tolerate extended financial losses.
Other publications such as Time magazine, National Geographic and Sports Illustrated have also cut jobs. In the UK, Reach, the country’s largest commercial news publisher, is cutting about a tenth of its workforce — or about 450 jobs — owing to a combination of a slump in advertising revenues and a drop in demand.
Condé Nast executive Anna Wintour last week announced she was folding the music publication Pitchfork into men’s magazine GQ and laying off several writers, including editor Puja Patel, fuelling anger from staff and music critics.
Amid the lay-offs, several US newsrooms have hit the picket lines in protest of their employers.
This week, Condé Nast employees across titles including Vanity Fair, Vogue and GQ staged a walkout at its New York headquarters, timed for the same day as Hollywood’s Academy Award nominations. Holding red balloons to imitate a red carpet, workers chanted: “Bosses get Prada, workers get nada.”
Last week, LA Times staff also walked off the job in protest over job cuts. Forbes’s union on Thursday began a three-day work stoppage.
Business Insider, which is set to cut about 8 per cent of staff, or about 50 employees, made the decision as part of a strategy laid out at the end of last year to refocus its coverage on core areas such as business and technology, rather than more general areas such as politics, said a person familiar with the plan.
This person added the cuts had no relation to the fight with Ackman, who has threatened legal action against Business Insider over plagiarism claims against the hedge fund boss’s wife. Following his criticism of its coverage, Axel Springer ordered an internal review of Business Insider’s reporting. The review concluded the reports had been “accurate and well documented”.
On Thursday, Barbara Peng, who took over as chief executive from Henry Blodget last year, told staff in a memo that job cuts would follow a new editorial plan to drive future growth.
Ackman responded to the news of the cuts, by posting on X that it “appears that they are purging and pivoting to attempt to become a legitimate business journal”.
This month, the Financial Times revealed Axel Springer has paid out dividends of more than €750mn over the past four years, including just weeks after announcing hundreds of job losses at its domestic news outlets last year.
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