The year 2024 has witnessed a seismic shift as media industry giants Google, Paramount, and Disney collectively announced a sweeping wave of massive layoffs, sending shockwaves through the business world and a question of the future of journalism.
Media houses get ready for massive layoffs
The news industry is having a rough start to the new year, with media institutions worldwide losing reporting staff as old financial structures that have kept most of the sector viable for decades collapse in plain sight.
The precipitous contraction, which occurred even as the presidential election season heated up and public attention and revenues historically increased, was on full show this month, with the first few weeks of 2024 ushering in a slew of devastating layoffs at news and media organizations coast to coast.
Earlier this week, the Los Angeles Times reduced its newsroom by more than 20%; TIME laid off scores of employees; and Business Insider announced an 8% personnel reduction. Meanwhile, hundreds of employees at Condé Nast, Forbes, The New York Daily News, and other publications staged historic walkouts to protest impending job losses.
These media corporations have cut billions of dollars in expenditures over the last year, largely in an effort to win over Wall Street. In addition, under profit pressure, they introduced ad-supported tiers, packaged their goods, and boosted the monthly subscription plan rates.
While significant, the recent layoffs are part of a more persistent storm raging through the media sector. Over the last 18 months, most news organizations have been forced to make painful decisions about reducing their employment.
CNN, The Washington Post, NPR, Vice Media, Sports Illustrated, Vox Media, NBC News, CNBC, and other organizations have reduced their reporting staffs. At the local level, layoffs have been practically constant, with media behemoth Gannett laying off hundreds of people and small outlets squeezing out already thin operations.
The newest round of layoffs follows 2023, which was the worst year for job cuts in the journalism business since COVID-19 upended the world in 2020, with almost 2,700 positions lost.
Bloomberg reports that Universal Music Group (UMG), one of the most prominent record labels in the industry, intends to lay off hundreds of employees later this quarter.
Bloomberg reported that the layoffs, which are reportedly the most extensive since the company went public in 2021, are a component of a larger reorganization.
TechCrunch reports that the animation division of Disney (DIS) may lay off as many as 20% of its 1,300 employees. The reductions are implemented as the company’s box office has labored and streaming profitability has lagged.
Reasons for the massive layoffs
Although every media outlet is confronted with its own set of difficulties, they are all confronted with severe industry headwinds brought about by technological advancements and the internet transformation, which have fundamentally altered the way in which the public obtains news and entertainment.
Audiences that formerly accessed news websites and newspapers and consistently browsed traditional cable channels are now preoccupied with consuming content and devoting time to platforms like TikTok and Netflix. This shift has resulted in significant reductions in both ratings and traffic.
As a result of this change in consumer behavior, brands are allocating their marketing efforts towards burgeoning digital domains, especially considering the tools they provide that enable advertisers to target audiences precisely.
Worse still, the online advertising divisions of news organizations have vanished, with social media and search titans devouring a substantial portion of the industry’s budgets. According to research published by Columbia University in October, technology behemoths Google and Meta ought to compensate news organizations with $14 billion in annual revenue in exchange for their search traffic and content.
The university described this estimate as “conservative.” Nevertheless, media companies have initiated prominent campaigns to obstruct legislation designed to recover a portion of the revenue lost from publishers in an effort to prevent payment for their content.