New York (CNN Business)Vox Media, owner of sites including Vox, The Verge and New York magazine, is furloughing about 9% of its employees for three months. The decision is one of several measures the digital media company announced Friday to cut costs after the coronavirus pandemic decimated its revenue sources.
The furloughs, which will run from May 1 to July 31, affect multiple departments including sales, events, production, IT, operations and editorial. Vox Media currently employs about 1,200 people, resulting in about 100 people facing three-month furloughs. In addition, about 1% of the company’s personnel will have reduced hours for the same time period. Vox Media will continue to cover the health benefits of those affected.
Vox Media CEO Jim Bankoff announced the changes on Friday in a memo to staff that was obtained by CNN Business.
“Everyone will feel the effect of the cost measures to some degree, but some considerably more than others. It’s our goal to treat those whose job status is impacted with the greatest possible care and support,” Bankoff said.
Vox Media and New York Media —which the former acquired last year — are both unionized, which means management is required to negotiate with each bargaining committee on any changes in employment status. One of the protections management agreed to in negotiations includes no further furloughs, layoffs or pay cuts until July 31, according to two sources.
Bankoff said he and president Pam Wasserstein will take 50% pay reductions. Vox Media will also implement a tiered salary reduction. Staffers making $130,000 to $200,000 will see their pay reduced by 15% while those whose salaries are more than $200,000 will have a 25% pay reduction. The company also will suspend 401K matching for all employees through the rest of this year.
The pandemic has prompted media companies to make up for the loss of advertising revenue with furloughs, pay cuts and layoffs as brands across many industries slash marketing and advertising budgets and eliminate discretionary spending. BuzzFeed, for example, implemented tiered pay reduction across the company. G/O Media, whose titles include Gizmodo and Deadspin, and Group Nine Media, which owns NowThis and The Dodo, laid off approximately 60 employees in total. Some local newspapers and alt-weeklies suspended print editions and furloughed employees, hoping that they will one day be able to rehire them.
Bankoff said Vox missed its “revenue goals by several million dollars in the first quarter” citing factors such as the “cancellations of SXSW and March Madness, the collapse of travel, sports and fashion-related advertising.”
“[T]he impact will be significantly greater in the second quarter,” he warned.
Vox Media reported a profit last year. In September, the company acquired New York Media, which includes the namesake biweekly print magazine and the websites The Cut, Grub Street, Intelligencer, The Strategist and Vulture.
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