Dreamworks Animation’s Kung Fu Panda 4 was #1 at the United States box office two weeks in a row and earned more than $268 million in its first three weeks. So why did the company inform an untold number of workers their contract would not be renewed? Reports range widely, in the latest in a series of entertainment and media layoffs in recent months.
Reports of corporate layoffs, reductions in force, or even mass firings are never pleasant to read, but when the names include well-known media and entertainment outlets such as Google, Los Angeles Times, Disney, and Paramount, the news hits even closer to home.
Historically, the public turns to media companies for information during difficult economic times and looks to entertainment to relieve stress. When those industries experience economic downturns themselves, concerns are raised across the board.
Some business analysts suggest layoffs in the media or entertainment industries do not necessarily indicate a faltering economy. Major publishing companies such as Condé Nast may have overhired during the post-pandemic rush to normalcy. So the current downsizing is closer to a workflow adjustment. Other media outlets, however, decided to shutter entire departments or throttle back production based on rising costs or decreased revenue streams.
Freelance writer Ashlee Fechino from The Happiness Function shares her experience. “I’m a travel writer, and on the last few media trips I have been on, other writers have shared their rates have been cut, their workload has been cut, or they are being asked to write for free for seasoned publications. This is all due to Google’s last few rounds of updates. Established travel websites are being wiped off the map. It is really sad.”
A few media outlets, notably news startup The Messenger, have shut down permanently. Others made surgical cuts to their current staff or placed a temporary embargo on new hires. Readers, viewers, and listeners will still receive quality products and services, but 2024 is proving to be more of a rebuilding season for the companies behind them.
Actions Taken by Print and Electronic Publications in 2024
Los Angeles Timeslaid off 20% of its newsroom in January.
Sports Illustrated laid off most of its staff (around 100) after failing to pay required licensing fees to its parent company in January.
Time laid off 15% of its staff, approximately 30 employees, in January.
Business Insider’s CEO Barbara Peng reduced staffing by 8% in January.
Forbes reduced its staff by 3% in late January.
TechCrunch laid off a small number of staffers and will end paid subscription options.
The Messenger, a news startup, shut down entirely at the beginning of February, leaving more than 300 employees jobless. The site was active for less than a year.
The Wall Street Journal laid off 20 staff members at its Washington, D.C., bureau in early February.
The Intercept dismissed 15 employees, including its editor-in-chief, in mid-February.
NowThis cut 50% of its editorial team in mid-February, a loss of 26 jobs.
BuzzFeed sold off a sub-brand, Complex, and then announced a 16% reduction in staff. The company already mothballed its entire news division in 2023.
Media Corporations Experience Reductions in Staffing
NBC News and MSNBC laid off approximately 75 employees in January.
CBS News also cut 20 jobs at its D.C. bureau in early February, as part of a larger round of layoffs involving 800 employees at Paramount.
Vice Media will stop publishing content on Vice.com and lay off hundreds of staffers.
Sky Group, owned by Comcast, plans to eliminate 1,000 positions, primarily within its engineering division. The company previously cut hundreds of jobs in 2023 as it shifted from satellite to internet-based TV.
Entertainment and Music Groups Face Workforce Challenges
Paramount Global laid off approximately 3% of its workforce, roughly 800 employees, on Feb. 13, 2024. These cuts were followed by rumors concerning the future of the media giant.
Alphabet made several workforce adjustments in 2024, including dismissing 100 YouTube employees. The reductions in force come after Alphabet slashed thousands of jobs across its engineering, hardware, and advertising teams to reduce labor costs.
Warner Music Group announced plans to lay off 600 employees, about 10% of its staff, despite previously reporting record fourth-quarter earnings.
Universal Music Group, one of the industry’s most dominant record labels, plans to lay off hundreds of employees during the first quarter of 2024, according to Bloomberg.
Pixar, Disney’s animation unit, is considering laying off up to 20% of its current 1,300 staff, according to TechCrunch. Pixar’s latest releases struggled at the box office, and streaming older titles has not been as profitable as projected.
Will Media and Entertainment Companies Recover?
All industries experience cycles of expansion and contraction, and the media industry is no exception. It would be difficult to imagine a time when consumers would stop listening to music, watching movies, or reading the news.
Many of these workforce decisions are based on factors other than the need for skilled journalists, musicians, or filmmakers. Media companies have fiscal responsibilities to their stockholders and investors, and many of these current reductions in force are temporary extensions of the belt-tightening process.
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Christopher Alarcon | Wealth of Geeks
This article was produced by Media Decision and syndicated by Wealth of Geeks.