Vox Media cuts staff, slows down recruitment due to growing economic recession fears
Jim Bankoff, chairman and chief executive officer of Vox Media Inc.
David Paul Morris | Bloomberg | beautiful pictures
Just a month ago, media executives expressed optimism that their companies were well positioned for the economic downturn.
Vox Media may have injected a dose of reality into the industry on Wednesday.
The privately held digital media company is laying off 39 employees, as well as slowing hiring and reducing non-essential expenses, according to a person familiar with the matter. The layoffs affect sales, marketing, recruiting, and certain editorial teams.
New York Magazine, which is owned by Vox Media, was not affected, said the person, who requested anonymity because the decisions are private. The company’s brands also include the eponymous store Vox, The Verge, Curbed and Now This. A spokesperson for Vox Media declined to comment.
In a memo sent to employees, Vox Media CEO Jim Bankoff directly cited deteriorating economic conditions for the decision.
“Current economic conditions are impacting companies like ours in many ways, with supply chain issues reducing marketing and advertising budgets across industries and economic pressures changing consumer spending patterns,” Bankoff wrote in a memo obtained by CNBC. “Our aim is to overcome greater uncertainty by making difficult but important decisions to change initiatives that have lower priority or lower staffing needs. under current conditions.”
He said in the memo that the cuts affect “less than 2% of the company.”
This early year, Vox Media acquires Group Nine, adding hundreds of employees to the company. Vox derives most of its revenue from advertising.
The digital media industry didn’t get the valuation bump that executives hoped might come with BuzzFeed’s decision to list shares. BuzzFeed goes public through a special purpose buyout company at $10 per share in December. Seven months later, BuzzFeed stocks under $2.
Vox Media’s decision to cut staff could be the tip of the iceberg for the media. Since 2000, year-on-year, the industry’s three biggest job losses have coincided with a recession – 2020 Covid-19 pullback, the financial crisis of 2007-09 and the burst of the dot-com bubble of 2001, according to data from Challenger, Gray & Christmas.
Official, NBER defines recession is “a significant decline in economic activity that spreads across the economy and lasts more than a few months.”
More than 60% of respondents CNBC survey This week predicted the Federal Reserve’s efforts to curb inflation by raising interest rates would lead to a recession. Of those predicting a recession in the next 12 months, most believe it will begin in December. US inflation up 9.1% in Junethe Highest jump in 40 years.
SEE: Fed doesn’t have a good answer here, recession chances are growing, says Jason Brady