Vice Media to Reorganize, Lay Off 10 Percent of Staff (Exclusive)
The cuts, which will impact around 250 people, are part of new CEO Nancy Dubuc's strategic plan to tighten spending and achieve profitability.
Vice Media is planning a reorganization that will include laying off about 10 percent of its workforce, as the once high-flying startup looks to rein in an unwieldy business that grew quickly during the height of the digital boom.
Around 250 jobs are expected to be cut, a company spokeswoman tells The Hollywood Reporter, as the 2,500-person Vice reduces redundancies internationally and reorients to focus on growth areas like film and television production and branded content. All departments at every level are expected to have layoffs, from IT to finance to television.
"Having finalized the 2019 budget, our focus shifts to executing our goals and hitting our marks," CEO Nancy Dubuc wrote in a memo sent to staff on Friday morning that was shared with THR. "We will make Vice the best manifestation of itself and cement its place long into the future."
Dubuc, in an October interview with THR, was forthcoming about her plans to reorient Vice for the future and tighten its spending in order to put it on a path to profitability, acknowledging that she was "not going to rule out more" layoffs at the company. Vice last year implemented a hiring freeze and attempted to reduce some of its workforce through attrition, but once executives finalized the strategic plan for the year, they made the decision to complete most of the cuts through layoffs.
Dubuc, the former A+E chief, became CEO of Vice at the end of May, taking over for the company's brash founder Shane Smith who announced in March that he would step back into the role of executive chairman. As the first outside CEO at the 25-year-old company, she is now tasked with helping it live up to the high expectations surrounding its $5.7 billion valuation and more than $1 billion in investments from the likes of Fox, Disney and TPG.
One of Dubuc's first projects was setting a plan that would bring order to the chaos that was created during the years when Vice transformed from a Montreal punk magazine to a global media organization. Chasing growth, Smith aggressively took Vice into new markets, opening up offices in nearly 40 countries and striking deals for linear and mobile content with media companies in every major region.
As part of the changes Dubuc laid out for staff on Friday, Vice will restructure its global workforce from one siloed by each international office into one built around its five business priorities going forward: film and TV production unit Studios, its international News team fueled by Vice's relationship with HBO, the digital business, the TV operation led by Viceland and ad agency Virtue. Administrative or support functions like human resources, legal and business development will report into Vice's Brooklyn headquarters or a regional hub.
Employees affected in the U.S., U.K. and Canada are expected to be notified today. The remainder of the cuts will take place over the coming weeks. Vice, whose employees recently ratified new contracts via WGA East, will pay out employee PTO and 10 weeks of severance and medical benefits in the U.S. Global separation packages will vary based on the country.
The company also is planning to invest in areas that Dubuc and her senior leadership team see as growth opportunities going forward. Those include the Studios division, which nabbed around $14 million from Amazon for Adam Driver drama The Report at Sundance this past week; ad agency Virtue, which has added 20 new clients to its roster in 2018; the digital news desk run by Josh Tyrangiel; and the sales team.
It is crucial that Vice, which the Wall Street Journal reported in November was on track to bring revenue between $600 million and $650 million in 2018, become profitable as investors get antsy for the company to find a buyer. Disney took a $157 million write-down on its Vice stake in November.
Dubuc told THR last year, "The question isn't if we're going to be profitable but how soon, and it's sooner than most people think." Per one source, Vice is expecting revenue growth of around 15 percent in 2019.
Vice last conducted a round of layoffs in July 2017, cutting 2 percent of staff, or around 60 employees, as it reoriented around its video efforts following a $450 million capital infusion from TPG.
The changes at Vice come amid an industry-wide contraction as online publishers that flourished during the heyday of social video look to rein in spending and live up to the expectations of the venture capital and traditional media investors that pumped billions into their businesses. This week BuzzFeed completed a round of layoffs that impacted 15 percent of its staff, or around 250 jobs, and Refinery29 cut 10 percent of its workforce last year.
Vice executives contend that the company is less reliant on digital than ever before. That division, which will be consolidated down from more than a dozen digital brands, currently makes up only about 20 percent of the business today, per Vice's spokeswoman.
Dubuc in her memo to staff noted, "We are fortunate that Vice's early diversification has made us more resilient to a shifting industry."
Feb. 1, 7 a.m. Updated to reflect that Vice's 2018 revenue was reportedly between $600 million and $650 million.