Vice Media reportedly plans to trim down its staff by 10% to 15% through a hiring freeze and attrition as the company misses its 2018 revenue goals.
The company’s Comscore traffic hit 27 million unique visitors in September, down from 49.1 million two years ago.
Vice Media has tried to diversify its revenue into non-ad supported buckets over the past few years like TV licensing and an advertising agency.
Other digital publishers like Refinery29 and BuzzFeed are also working to diversify their revenue and shifting headcounts to figure it out.
Vice Media is feeling the heat.
Former A+E Networks exec Nancy Dubuc took over the reins of Vice Media as CEO from cofounder Shane Smith in March amid a string of controversies and a rough market in the digital media industry.
According to a report from The Wall Street Journal published Wednesday, Vice Media’s revenue will be flat relative to last year at $600 to $650 million. The report also outlined the company’s dip in Comscore traffic and challenges growing its advertising business, which relies on selling advertisers sponsored content that mimics editorial articles.
In short, living up to its eye-popping $5.7 billion valuation is proving a challenge for Vice. On Thursday, Disney, which is one of Vice’s biggest backers, said that it had taken a $157 million write-down on its original $400 million investment, equivalent to a 40% decline.
Read more: At Vice Media’s once high-flying ad agency Carrot, a founder is out and insiders describe a hostile culture toward women
Like other digital publishers, advertising has historically made up the bulk of Vice Media’s revenue, but the company’s business is split up between web publishing, a TV channel run with A+E Networks, licensing, and an advertising agency.
For the web publishing business, traffic to its websites is down and the company is reportedly considering folding several of its sites together. On the TV side, Vice’s weekly news show on HBO is winding down this year and the company is prepping a new live nightly show called “Viceland Live” for its Viceland channel. And the agency business that once contained several ad agencies is now consolidated into one umbrella organization called Virtue Worldwide.
Dubuc is trying to turn things around. Through a hiring freeze and attrition, Vice Media plans to slim down its staff by 10% to 15%, per the Journal’s sources.
“They need to rightsize their business — that is muddied by the promises that they made to investors and the promises that they didn’t deliver on to other investors,” said Ian Schafer, a former agency exec who founded ad agency Deep Focus.
Another media buyer source at a large agency suggested that the combination of the new hiring freeze, dip in traffic, and the company’s cultural reputation, had put Vice at a tipping point with advertisers.
“The bluff and hype that fueled the business has finally caught up, and now the skepticism many advertisers had is proven justified,” the buyer said. “Adults are now in the …read more
Source:: Business Insider