No media publisher is immune in the coronavirus era

Sara Fischer

Illustration: Sarah Grillo/Axios
COVID-19 has accelerated the shrinkage of journalism.

Why it matters: If it could happen to The Atlantic, where 68 staffers were laid off today, it could happen to any media company.

Hundreds of local, national and even international newsroom jobs have been axed, and student internships and fellowships have mostly been canceled.The big picture: 2.4 million Americans filed for unemployment last week, reports Axios' Courtenay Brown.

The pre-COVID record number of filings was set in 1982 at 695,000.

New York state's Labor Department told reporters this week it has paid out 4.5 years' worth of unemployment benefits in just over two months.

Between the lines: The coronavirus hit diversified publishers on multiple fronts.

Advertising: Publishers who enjoyed record COVID-19 web traffic weren't able to monetize it, as ad rates collapsed.

Events: In-person events, where The Atlantic focused considerable attention and where publishers can command a premium, are currently out of the picture. Virtual events are on the rise, but they don't command the same price point.

E-commerce: Amazon and big mass retailers have cut affiliate fees, cutting commerce revenue from many publishers.

Subscriptions: Many publishers have pivoted toward subscriber models, but with a few exceptions, those gains aren't even close to enough to compensate for the lost ad revenue.

What's next: Layoffs like this in crisis usually happen in waves, so a fall coronavirus resurgence could bring another round of job losses.

In the future — as more companies integrate remote work into their culture — other jobs will begin to get eliminated too, like in-person sales teams or teams that help produce print products that will not come back.

The bottom line: The Atlantic's troubles, combined with the struggles at other billionaire-backed publications like the Los Angeles Times, serve as an important reminder that the industry has few sustainable paths forward without viable business models.

The Atlantic lays off almost 20% of staff
Sara Fischer AXIOS

Photo: Robert Alexander/Getty Images

The Atlantic is layingoff nearly 20% of staff, according to an internal note from David Bradley, the publication's chairman, that was obtained by Axios.

Why it matters: It's the latest media company that's been been forced to take drastic measures to survive the economic fallout from the coronavirus pandemic.

The state of play: The 68 staff cuts are mostly attributable to the collapse of the company's events business, which was one of its strongest pillars for many years.

In the memo, Bradley says that sales, editorial and events staff are all impacted.

"There is no fault on the part of people leaving the firm. What makes this so particularly difficult is that these are exceptional and beloved Atlantic colleagues. They are exactly the same good people who were selected to join us at the outset. Measure for measure, they have contributed to The Atlantic as have those who are remaining. It is only that the ground has shifted," Bradley wrote in his note to staff

"I had thought that I would spend some substantial part of this memo explaining the reasoning behind our decision. But, I think it may speak for itself. The particular timing is clear — a global pandemic that has shuttered the economy generally, advertising acutely, and in-person events altogether," he added.

Between the lines: The Atlantic's new majority ownership stake from Emerson Collective, the impact investment vehicle owned by Laurene Powell Jobs, has allowed the company to accelerate its growth in recent years, including a major staff increase and expansion that began in 2018.

The big picture: The pandemic is forcing dozens of major media companies, including newer, digitally-native media companies and older magazine companies, to carry out layoffs and pay cuts.
The Atlantic joins The Hollywood Reporter, Fortune, Billboard, The Economist Group, Group Nine Media, BuzzFeed News, Vox Media, Bustle Digital Group, Cheddar, Maven Media, G/O Media, Protocol and others who have resorted to layoffs and furloughs.