Vox Media, which owns titles including New York Magazine, Vulture, The Verge and SB Nation, is furloughing 9% of its employees without pay for a three-month period. It’s also taking other steps to cut costs during the COVID-19 downturn, including tiered salary reductions for remaining working staff and halting 401(k) matching contributions.
Effective May 1-July 31, about 9% of Vox Media’s employees — about 100 people — will be furloughed without work, CEO Jim Bankoff wrote in an internal memo, which was obtained by Variety.
“Today we are taking some of the most difficult and important cost reduction actions in our company’s history,” Bankoff wrote. “The expectations that we had just a few weeks ago for our business and our lives no longer apply.” He said he couldn’t predict the extent of Vox Media’s revenue drops but said those will be in “the tens of millions” of dollars. The company missed Q1 revenue targets by several million dollars and “the impact will be significantly greater in the second quarter,” Bankoff wrote.
A Vox Media spokesperson verified the authenticity of Bankoff’s memo but declined to comment further.
Last year, Vox Media acquired New York Media, publisher of New York Magazine, in an all-stock deal to boost their combined audience reach and gain some synergies of scale. The new company had about 1,200 employees, roughly 30% of them from New York Media.
New York-based Vox Media’s brands are Vox, New York Magazine, The Verge, The Cut, Eater, Vulture, The Strategist, Polygon, Intelligencer, Curbed, Grub Street and Recode.
Like other digital-media players, Vox Media has already encountered financial headwinds; two years ago, it laid off 5% of its workforce. But Bankoff wrote that the economic disruption from the COVID-19 pandemic “is clearly very different” in its scope and impact.
The company’s goals for cost cutting are to minimize cash burn “while attempting to limit the impact on our employees,” according to Bankoff’s memo.
Vox Media’s furloughs — and reduced work hours for certain employees — will disproportionately affect “areas where short-term demand will be lower,” according to Bankoff. Those include sales, sales support, production, events; editorial positions including at Curbed and SB Nation’s national sports coverage; and support functions like IT and office operations. All furloughed employees will continue to be covered under the company’s health insurance plan.
In addition, Vox Media is cutting salaries for employees who make $130,000 or more from May 1-July 31. Those who earn between $130,000-$199,999 will see a 15% pay reduction; those making $200,000 and over will have a 25% reduction. Bankoff said he and Vox Media president Pam Wasserstein will reduce their salaries by 50%.
The company also is freezing pay raises through the end of 2020 and halting its 401(k) matching program through the end of the year.
The WGA East-affiliated Vox Media Union, which reached a collective bargaining agreement with the company last year for 350-plus staffers, said in a statement that it disagreed with management’s decision to furlough employees “especially after hundreds of us told the company we were willing to take wider pay cuts to save all jobs” but added that Vox Media agreed to reduce the number of furloughs. The union also said it won guarantees from Vox Media for no layoffs, no additional furloughs, and no additional pay cuts through July 31, along with “enhanced severance for any layoffs that occur in August-December.”