Jim Bankoff, chairman and chief executive officer of Vox Media Inc.
David Paul Morris | Bloomberg | Getty Images
Vox Media, the digital media company that owns SBNation, New York Media, The Verge and other brands, is preparing to announce a furlough of about 100 employees later this week, according to people familiar with the matter.
Vox executives are negotiating details with the Writers Guild of America, East, which represents about 350 people at Vox, said the people, who asked not to be named because the discussions are private. The number of people furloughed could rise or fall slightly depending on those negotiations, which are confidential, said the people. A announcement will be made by the end of the week, the people said.
Vox is discussing three-month furloughs for employees and is focusing on employees whose coverage areas have diminished during coronavirus quarantines, such as dining website Eater and SBNation, said the people. Temporary three-month employee pay cuts aimed at the company’s highest earners are also being discussed, the people said. Vox also wants to ensure health care is covered for furloughed employees, one of the people said.
A Vox spokesperson declined to comment.
Vox is trying to avoid layoffs altogether as executives estimate future advertising revenue, which is set to decline significantly this year as the world economy has been ravaged by the coronavirus and subsequent quarantines. Vox was profitable in 2019, according to a person familiar with the matter, as CEO Jim Bankoff has built out businesses that don’t rely as heavily on digital advertising, such as events and podcasts. Still, in an email to employees last week, obtained by CNBC, Bankoff said that the company’s goal of becoming cash-flow positive for 2020 was no longer realistic.
“I’ll state the obvious that the advertising market is experiencing a downturn unlike ever before,” Bankoff wrote. “While at this point I can’t put an exact number on our own decline, I know that – just like nearly all other companies and publishers – we have already seen a significant impact in March and our business will continue to be deeply affected this quarter, next quarter and likely for the remainder of 2020. It’s important to emphasize that we expect our ad business to rebound eventually, but since the timing cannot be predicted, we need to plan with extra caution.”
While WGAE covers only about 350 of the company’s 1,200 employees, Vox doesn’t want to make one agreement for those workers (editorial employees at Vox, Eater, SBNation, Curbed, Polygon, Verge and Recode) and another for its other employees, said one of the people. Vox agreed to acquire New York Media, which owns New York Magazine, last year. New York Media employees are unionized through NewsGuild, which hasn’t yet agreed to a contract with Vox since the acquisition’s completion.
Bankoff’s email also mentioned that the company is curtailing travel expenses, including off-sites and events; pausing some IT and facilities expenditures; limiting or ending relationships with freelancers and vendors; and “scaling back on all in-office perks like snacks and happy hours for the remainder of 2020 regardless of when we are back on-site.”
Bankoff’s email did contain some good news, including record growth for NYMag digital subscriptions: “The week of March 23 was the greatest week for new subscriptions since New York launched its digital subscription product in 2018.”
Vox’s decision to cut costs trails other digital media companies, such as Group Nine Media and Buzzfeed. Group Nine announced last week it was going to lay off about 7% of its employees and furlough a smaller number. Buzzfeed said in March that employees’ pay would be cut on a sliding scale depending on salary.
Disclosure: CNBC parent NBCUniversal is an investor in Vox Media.