Magazine giant Condé Nast will cut its workforce by about 5 percent, backing down from a much-publicized plan to build an in-house video studio to meet Hollywood’s demand for film and TV ideas.
This layoff will affect approximately 270 employees. Condé Nast Chief Executive Roger Lynch told workers in a note Wednesday morning that the cuts were a response to digital advertising pressures, declining social media traffic and changes in audience behavior, including the move toward short-form video. He said the video business would be combined with the editorial brands.
“While we cannot control platform algorithms or how AI may alter search traffic,” Mr. Lynch wrote, “we believe our long-term success will be determined by enhancing the many areas we can control.” Can, including subscription and e-commerce. , where we relate directly to our audience.
In an interview, Mr. Lynch said most of the growth in Condé Nast’s video business is happening on platforms like TikTok and YouTube Shorts, which are less attractive to publishers. He said the company would continue to produce videos, with producers working closely with staff from magazines such as The New Yorker and Vogue.
“Long-form video on YouTube is declining year over year,” Mr. Lynch said. “It’s a change of audience, but it was also YouTube that was chasing what was happening on TikTok.”
A decade ago, many digital publishers looked to Hollywood as a potential source of cash, with producers and directors turning their scrappy magazine stories into scripts for the silver screen. Some invested heavily in building in-house studios or bought them, as Vox Media did when it acquired film and TV producer Epic in 2019.
Perhaps the most ambitious of these studios was Condé Nast Entertainment, a major division of Condé Nast. in charge of Developing articles from publications like The New Yorker, Wired and Vanity Fair – intellectual property in Hollywood parlance – into major motion pictures and TV shows. A series of high-profile media executives were hired to lead the division, starting in 2011, including former CW and Spotify executive Don Ostroff and, most recently, Agnes Chu, who left in 2020. Joined from Disney in .
The division achieved some success. “Cat Person,” a film based on a viral New Yorker short story that explores uneasy relationship dynamics, premiered at this year’s Sundance Film Festival. “The Old Man and the Gun,” a 2018 film about an aging bank robber based on David Grann’s New Yorker article, earned a Golden Globe nomination for Robert Redford in the title role.
But cash coming from Hollywood has declined recently, with investors expecting streaming services to abandon the growth-at-any-cost approach in favor of profitability. And online audiences are increasingly shifting to platforms like TikTok and YouTube, where short content is key and monetization remains elusive.
It has spun off parts of Condé Nast Entertainment. Ms. Chu left her role at the end of October, a move that Mr. Lynch flagged across the company Comment Last month regarding the restructuring of the senior leadership team.
A spokesperson for Condé Nast said that “the company will maintain the Condé Nast Entertainment brand for now,” adding that it did not plan to name a new head of the division. The company will continue to develop long-term projects with studios associated with its magazines. Helen Estabrook, head of global film and television at Condé Nast, will now report to Mr Lynch.
Condé Nast’s business has struggled in recent years, at one point losing nearly $100 million annually, as the magazine publisher tried to adapt to the digital age. Mr. Lynch, who joined the company in April 2019, sought to find new revenue streams and merge the domestic and international divisions.
mr lynch told The Wall Street Journal reported that Condé Nast made a profit in 2021 for the first time in years. He said this year that revenue increased in 2022, but fell slightly short of its target.
Although advertising is expected to decline slightly this year, Mr. Lynch said in the interview that revenue from digital subscriptions and e-commerce has increased. Those divisions are growing rapidly, but they are still a smaller part of Condé Nast’s overall business than advertising.
“If you think about all the transformation work we’ve done since we came here,” Mr. Lynch said, “some of them resulted in some staff cuts in some areas at the beginning, but it really helped us invest.” Was making me capable. In other areas of our business.”
Mr Lynch said the job cuts would take place over the next few months. Condé Nast has approximately 5,400 full-time employees globally.
Hundreds of Condé Nast employees unionized last year to form a group that includes employees at publications such as Architectural Digest, Bon Appétit and Vogue. The union is currently negotiating its first contract with the company.