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Vox Media Lays Off About 50 as Social Video Cools

By Published on .

Vox Media CEO Jim Bankoff.
Vox Media CEO Jim Bankoff. Credit: Photograph by Scott Eells/Bloomberg, Composite by Ad Age

Vox Media CEO Jim Bankoff issued a memo to staff Wednesday morning announcing layoffs to roughly 50 employees, or about 5 percent of its workforce, with publications Racked, Curbed, SB Nation and its video services team hit hardest.

The company is also offering to reshuffle about a dozen employees to different roles and will make "smaller changes elsewhere in the company," the memo said.

"In the past 9 years, my group emails have mainly been to celebrate successes," Bankoff wrote in the memo. "Unfortunately, today is one of the toughest days we've had as a company. As a result of our decision to wind down certain initiatives, we'll be saying goodbye to some of our talented colleagues who have made valuable contributions to our success."

The Hollywood Reporter first reported the news.

The company might be struggling to retain the $1 billion valuation it received in 2015 after NBC Universal dished out $200 million in a round of funding. "I just don't see how they live up to that billion dollar valuation," one major publishing executive said, asking to remain anonymous to protect industry relationships. "Brands have little loyalty to media properties and in many cases, big campaigns come in a one-and-done deal."

Like many publishers, Vox Medialacks a subscription paywall and mainly relies on advertising to survive. "You need real, multiple revenue streams to occur and they have no subscriptions," the publishing executive says. "They only have advertising and no media company in history has ever survived on a single revenue stream."

Facebook giveth ...

Other hurdles include Facebook's ever-changing initiatives. The social media power recently made an algorithm change to show users fewer news stories, forcing publishers to rethink their strategies.

The cuts Vox Media made Wednesday mainly focused on staffers who made social-media video at smaller brands. "It has become clear, due to industry changes over the past few months and our long term budgeting process, that those initiatives won't be viable audience or revenue growth drivers for us relative to other investments we are making," Bankoff said in the memo. "Building a company requires us to take calculated risks. I take responsibility for bets that don't work out."

Insiders at Vox Media say business is strong. Unique visitors in January 2018 were 20 percent higher than in the month a year earlier, according to the company. The company still intends to create video for social platforms, but "in a scaled-back way," a person familiar with its plans said.

Vox Media has added nearly a thousand employees in the past two years, according to Bankoff, and is on track to keep growing.

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