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Vox Media cuts staff, decreases hiring as recession fears grow

Jim Bankoff, chairman and ceo of Vox Media Inc.

David Paul Morris | Bloomberg | Getty Images

Only a month ago, media executives expressed optimism that their companies were well positioned for an economic slowdown.

Vox Media could have injected a dose of reality to the Wednesday.

The privately held digital media company is laying off 39 employees, in accordance with a person acquainted with the matter, in addition to slowing hiring and reducing non-essential expenses. The layoffs affect employees in sales, recruiting and certain editorial teams.

NY Magazine, that is owned by Vox Media, isn’t affected, said the individual, who asked never to be named as the decisions are private. The business’s brands likewise incorporate namesake outlet Vox, The Verge, Curbed and today This. A spokesperson for Vox Media declined to comment.

In a memo to staff, Vox Media CEO Jim Bankoff directly cited deteriorating fiscal conditions for your choice.

“The existing fiscal conditions are impacting companies like ours in multiple ways, with supply chain issues reducing advertising budgets across industries and economic pressures changing the techniques consumers spend,” Bankoff wrote in the memo obtained by CNBC. “Our aim would be to get before greater uncertainty by making difficult but important decisions to pare back on initiatives which are lower priority or have lower staffing needs in today’s climate.”

He said in the memo that the cuts affect “under 2% of the business.” Earlier this season, Vox Media acquired Group Nine, adding a huge selection of employees to the business. Vox derives nearly all its revenue from advertising.

Several employees at Thrillist, among the brands acquired in the Group Nine deal, tweeted Wednesday they are let go.

The digital media industry hasn’t gotten the valuation bump executives hoped might happen with BuzzFeed’s decision to go public. BuzzFeed went public with a special purpose acquisition company at $10 per share in December. Seven months later, BuzzFeed shares are below $2.

Vox Media’s decision to cut staff could be the tip of the iceberg for media. Since 2000, on a year-by-year basis, the largest 3 years for job losses in the market all coincided with recessions the 2020Covid-19pullback, the 2007-09 financial meltdown and the 2001 dot-com bubble bust, in accordance with data fromChallenger, Gray & Christmas.

Officially,the NBER defines recessionas “a substantial decline in economic activity that’s spread over the economy and lasts lots of months.”

A lot more than 60% of respondents to a CNBC Survey this week predicted the Federal Reserve’s efforts to rein in inflation by hiking rates will result in a recession. Of these who predict a recession within the next 12 months, most believe it’ll begin in December. U.S. inflation rose 9.1% in June, the highest jump in 40 years.

WATCH: The Fed does not have any good answers here, recession probability keeps growing, says Jason Brady

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