September 15, 2016 | No Comments
Executives from The Guardian said today there will be cuts at the British news organization’s U.S. operation, announcing a 30 percent reduction in headcount across the board.
In a meeting with newsroom staff, Guardian Media Group CEO David Pemsel called the changes a “course correction.” Eamonn Store, the CEO of The Guardian’s U.S. operations, told staff that the changes were due in part to low ad sales, and revenue projections that are “not enough to maintain our current cost base.” Store said that the company needed to make up for a revenue shortfall of $4.4 million over the next six months.
The company plans to offer buyouts to staff first, and will move on to layoffs if necessary. A source briefed on the plans said the culling would amount to a reduction of about 50 jobs across the 150-person organization. Cuts in the newsroom will be negotiated by the union that represents Guardian U.S. journalists.
In an email to staff that was sent shortly after this story was initially published, Pemsel and Guardian editor in chief Kath Viner blamed volatility in the U.S. and U.K. media industries, where publishers are struggling to achieve digital advertising growth as Facebook and Google suck up more and more of the market share.
“It is inevitable that such seismic shifts in the business model are adversely impacting our revenues despite the Guardian’s strong US brand recognition,” they wrote. “The full impact of these changes will bring Guardian US closer to its target of break even in 2017/18 and provide a clearer financial framework for Guardian US for the years up to 2021 and beyond. However, as in London, we will continue to take the necessary action to manage the cost base in a volatile market in order to protect Guardian journalism in perpetuity.”
The downsizing is a blow to an ambitious global expansion plan that took flight when The Guardian launched a New York-based U.S. digital edition in 2011. The idea was to engage The Guardian’s already significant U.S. audience while adding many new readers who could juice the type of growth needed to scale the publication’s global advertising revenues. The Guardian launched an Australian outpost in the same vein.
Guardian U.S. quickly became a prominent player in the U.S. news scene, largely thanks to its Pulitzer Prize-winning work in breaking open the story of Edward Snowden’s N.S.A. surveillance revelations. But its financial prospects have been less clear.
Guardian U.S. also has grappled with a series of leadership changes, as well as tumult back at the mothership in London, where executives have been reigning in costs and implementing cuts to make up for steep losses in recent years. The focus now is on a membership program that management hopes will carve out a sustainable future for the 195-year-old institution.