The Guardian, BBC announce major cuts to deal with pandemic fallout

British media outlets the Guardian and the BBC announced major layoffs on Wednesday, citing financial strain due to Covid-19.

The Guardian confirmed it was cutting 180 jobs, including 70 in its editorial department after the media group’s revenues dropped by £25 million ($31.6 million) for the year.

In a statement addressed to staff, editor-in-chief Katharine Viner and the Guardian Media Group CEO Annette Thomas said that while the pandemic has boosted audiences and reader donations, its effect on advertising and newspaper sales had created an “unsustainable financial outlook for the Guardian”.

The BBC announced a further 70 job cuts, after previously indicating that the pandemic had caused delays in collecting the television license fees that fund the public broadcaster.

The decision comes on the back of 450 newsroom job losses as part of the BBC’s £80 million ($100 million) savings drive in January, which were then suspended due to the demands of pandemic coverage. A separate 450 layoffs at regional newsrooms were announced in June.

Fran Unsworth, the corporation’s head of news, said Covid-19 had “changed all of our lives” and had also “led us to re-evaluate exactly how we operate as an organisation”.

“Our operation has been underpinned by the principles we set out earlier this year – fewer stories, more targeted and with more impact. For BBC News to thrive, and for us to continue to serve all our audiences, we have to change,” she said.

The Andrew Neil Show, a political discussion programme hosted by Andrew Neil – one of the BBC’s top political broadcasters over the past two decades – will be removed from scheduling.

The Daily Mirror, which owns the Daily Express, also said 550 jobs would be slashed as revenues have plummeted 30 percent during the pandemic.

The news is just as grim across the Atlantic, with reports suggesting that Vox Media is preparing staff cuts to both unionised and non-union workers as business has taken a battering amid the pandemic.

Vox Media, which owns Vox, New York Magazine, The Verge and SBNation, was 40 percent off its forecast for the second quarter and plans to miss its annual target by 25 percent. Only two months ago, the company furloughed about 100 employees without pay for a three-month period.

Other savvy digital outlets have felt the pinch too.

In May, 155 people lost their jobs at Vice Media and Quartz laid off 80. BuzzFeed furloughed 68 staffers without pay through mid-August, and extended salary reductions till the end of 2020.

Conde Nast, publisher of Vogue, Vanity Fair and The New Yorker, cut 100 people and slashed pay by 10 to 20 percent for over half its work force for five months beginning in May.

During the same period Qatar’s Al Jazeera Media Network relieved over 100 staff, with at least 35 laid off across the broadcaster’s popular digital platforms, with potentially more to follow in the coming months.

An inevitable demise?

The news media business was already on shaky ground before the pandemic hit.

For decades, media companies and publishers relied on advertising as their primary means of revenue, and with the advent of the internet, most of these outlets assumed that they could replicate a similar advertising model to monetise their digital content.

However, this model was disrupted by Google and Facebook. The two tech giants alone have cornered 70 percent of total digital ad spending, forcing publishers to find alternative methods to generate revenue.

Those like The Financial Times, Wired and the Wall Street Journal responded by adopting a paywall-based subscription model to monetise content, while others like The Guardian opted to stay free-to-read and focused on digital growth.

But an increasingly fractured digital terrain has not been hospitable. Social media rapidly monopolised news consumption: around two-thirds of internet users now receive their news through platforms like Facebook and Twitter than traditional media.

According to the LA Times, nearly half of US newspaper journalism jobs have vanished since 2008. Waves of layoffs have become the norm in the industry.

The blow Covid-19 struck has been devastating, and the economic downturn that followed has led to numerous pay cuts, layoffs and shutdowns across a swathe of news outlets.

Finding audiences has not been the issue; hunger for consuming news during a crisis has resulted in a boost in readership for outlets. But with the pause or closure of businesses and commercial activity, crucial advertisement financing has dried up.

As a result, legacy media and new media alike have slashed their rosters, and national and local outlets have been forced to make difficult decisions.

The New York Times estimated 36,000 employees of US news media companies have been laid off, furloughed or had their pay reduced since Covid-19 hit.

In an attempt to buoy the industry, Facebook in March announced $25 million in emergency funding for local news through its Facebook Journalism Project, adding $75 million to purchase newspaper ads.

In April, Google offered its own $100 million journalism fund “to deliver urgent aid to thousands of small, medium and local news publishers globally.”

Without long-term investment in local news and innovative journalism, the media business’ steady decline will continue unabated. Government needs to be part of the solution.

The National Union of Journalists (NUJ) called for an immediate windfall tax of 6 percent on tech companies to offset financial ruin the pandemic had wrought upon the news media.

“Journalists are not seeking handouts or compensation for the industry – we are looking for investment in our future to transform the media industry, make it fit for our collective purpose and truly serve the public good,” NUJ general secretary Michelle Stanistreet said.

Many publishers have said that downsizing decisions were short-term responses to the pandemic, and they are hopeful that laid off staff will be rehired or that paid leave won’t turn into layoffs.

But is that realistic? The media industry is not known for having excess cash flow, and numerous outlets have just been living on borrowed time. Has Covid-19 only accelerated their inevitable demise?

As dire as the situation is, a complete view of the industry’s devastation often fails to account for the precarious existence of freelance journalists or contractors, who aren’t afforded unemployment or other protections.

To do so means that media outlets would have to reconsider their relationship with freelancers and their complicity in the current state of news media.  

Media analyst Ken Doctor described the pandemic “an extinction event” for news media – magnitudes worse than the crisis experienced during the 2008 financial collapse.

For many in the industry today, it already is.