More Layoffs and Pay Cuts: Journalism Bled Dry as Pandemic Rages On
While the public health crisis envelopes the nation, journalists across the country are providing essential coverage, informing their communities with critical information that can save lives. Simultaneously, the industry is being assailed from all sides beginning with big tech’s dominance of the online marketplace draining publishers’ ad revenue and the decimation of newsrooms that have seen a surge in layoffs nearly three times higher than at this point last year. Reporters and newspapers are risking their health and safety for the public good, with many newspapers and other media removing any subscription limits and providing their coronavirus coverage for free. Despite an online traffic surge, ad revenues continue to plummet.
The pandemic has worsened a business environment for news outlets that was already desperate because Google and Facebook have siphoned off billions in ad revenue that used to sustain local news. As many as 36,000 employees have been laid off, furloughed or had their pay reduced since the start of coronavirus. The collapse of advertising revenue and the overall economic decline is an “extinction-level” crisis for local news in the United States.
Layoffs from major outlets, like the BBC and the Guardian, is evidence even large newsrooms are not immune. This trend of upward mergers, furloughs and pay cuts are familiar for an industry that consistently sees decimation. This crisis is already projected to surpass the losses seen in the 2008, global financial crisis and comes after a decade-long continuation of job losses exacerbated by big tech’s exploitation of the news industry’s business model to pad its profits.
“There have been 11,027 job cuts revealed this year, compared to 4,087 in the first half of 2019…It was also 116 percent higher than the 5,104 newsroom cuts announced through June 2018. That year’s full-year total of 11,878 was the worst year for newsrooms since 2008, when 14,265 newsroom cuts were made.”
These cascading crises are creating opportunities for vulture capitalists to pick over the carcass of the industry. The largest newspaper chain in the United States by circulation is Gannett, now owned by GateHouse Media in a merger last fall that was backed by Apollo Global Management. And last week’s purchase of the McClatchy chain at a bankruptcy auction by the hedge fund Chatham Asset Management.
The following is a statement from Laura Bassett, former Senior Politics Reporter for HuffPost who was laid off in January 2019, and co-founder of the Save Journalism Project:
The local news business is on the brink of extinction. Google and Facebook destroyed the business model for many news outlets. Vulture capitalists have picked over the carcass to scavenge once-iconic newspaper chains. Now this pandemic threatens to wipe out local news. We need action to save journalism.