Quibi is implementing pay cuts for senior executives as its 2-month-old entertainment app struggles to catch on with viewers amid the novel coronavirus pandemic.
Senior executives, including CEO Meg Whitman and chairman Jeffrey Katzenberg, will take a 10 percent pay cut in an effort “to tighten our belt,” they wrote in a memo to staff Wednesday morning that was shared with The Hollywood Reporter.
“Quibi is in good financial position,” they said, describing the pay cuts as “the right thing to do.”
The Wall Street Journal, which first reported on the pay cuts, reported that the company had discussed laying off around 10 percent of its 250-person staff but did not have plans to follow through on those discussions. In their memo, Whitman and Katzenberg said, “We are not laying off staff as part of cost saving measures.” They added that they had “recently added a dozen new Quibi employees.”
Quibi launched April 6 with a 90-day free trial to lure subscribers to its slate of shortform video series from Chrissy Teigen, Antoine Fuqua, Idris Elba and others. The company, led by Whitman and Katzenberg, had raised nearly $2 billion to bring mobile-first, bite-sized programming to people on the go. But those plans were upended by the shutdown implemented across the U.S. to prevent the spread of the novel coronavirus.
So far, Quibi’s early growth has been underwhelming. Katzenberg told The New York Times in May that the app was downloaded 3.5 million times and had 1.3 million active users during that period. In that interview, he acknowledged that those numbers were lower than anticipated. “It’s not close to what we wanted,” he said after noting, “I attribute everything that has gone wrong to coronavirus.”
Quibi now has 1.6 million subscribers to its free trial and has been downloaded 4.5 million times.
To make Quibi more appealing to homebound Americans, the company has added support for Apple AirPlay, which means subscribers with Apple TVs can now stream Quibi shows to their television sets. The company will also add support for Chromecast in June. On the content side, Quibi has renewed unscripted series Thanks a Million and cooking competition show Dishmantled.
WSJ previously reported that Quibi’s advertisers — who committed $150 million up front to be part of the app’s launch — are looking to renegotiate their contracts based on Quibi’s early performance.
A number of Hollywood companies, including Disney, NBCUniversal and talent agencies UTA and CAA, have implemented pay cuts amid the coronavirus, which has halted film and TV productions and softened the advertising market.