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Condé Nast, Publisher of Vogue, Will Cut 5% of Its Work Force

The magazine giant Condé Nast will cut about 5 percent of its work force, backtracking on a much-ballyhooed plan to build up an in-house video studio to tap into Hollywood’s demand for film and TV ideas.

The layoffs will affect about 270 employees. Roger Lynch, the chief executive of Condé Nast, told workers in a note on Wednesday morning that the cuts were a response to digital advertising pressures, a decline in social media traffic and shifting audience behaviors, including a move to short-form video. He said the video business would be folded in with the editorial brands.

“While we can’t control platform algorithms or how A.I. may change search traffic,” Mr. Lynch wrote, “we believe our long-term success will be determined by growing the many areas that we can control, including subscriptions and e-commerce, where we directly own the relationship with our audience.”

In an interview, Mr. Lynch said most of the growth in Condé Nast’s video business was happening on platforms like TikTok and YouTube Shorts, which are less lucrative for publishers. He said the company would continue to create videos, with producers teaming up with employees at magazines like The New Yorker and Vogue.

“The longer-form videos on YouTube are actually in decline year over year,” Mr. Lynch said. “That is an audience shift, but it was also YouTube chasing what they were seeing happening on TikTok.”

A decade ago, many digital publishers saw Hollywood as a potential wellspring of cash, where producers and directors would transform their dishy 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 the film and TV producer Epic in 2019.

Perhaps the most ambitious of these studios was Condé Nast Entertainment, a prominent division within Condé Nast in charge of developing articles from publications such as 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, which was started in 2011, including the former CW and Spotify executive Dawn Ostroff and, most recently, Agnes Chu, who joined from Disney in 2020.

The division had some success. “Cat Person,” a film based on a viral New Yorker short story that explores uncomfortable relationship dynamics, premiered at the Sundance Film Festival this year. “The Old Man and the Gun,” a 2018 movie about an aging bank robber based on a New Yorker article by David Grann, earned a Golden Globe nomination for Robert Redford in the title role.

But the gusher of cash coming from Hollywood has ebbed of late, with investors expecting streaming services to abandon their grow-at-any-cost approach in favor of profitability. And online viewership is increasingly shifting to platforms like TikTok and YouTube, where shorter content is king and monetization elusive.

That has left parts of Condé Nast Entertainment on the chopping block. Ms. Chu left her role at the end of October, a move that Mr. Lynch flagged in a companywide note last month about the restructuring of the senior leadership team.

A Condé Nast spokeswoman said that “the company will keep the Condé Nast Entertainment brand for now,” adding that it didn’t plan to name a new head of the division. The company will continue to develop longer-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 about $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 combined the domestic and international divisions.

Mr. Lynch told The Wall Street Journal that Condé Nast turned a profit in 2021 for the first time in years. He said this year that revenue grew in 2022, but fell just shy of its target.

Though advertising is expected to decline slightly this year, Mr. Lynch said in the interview that revenues from digital subscriptions and e-commerce had increased. Those divisions are growing quickly, but they’re still a smaller part of Condé Nast’s overall business than advertising.

“If you think back to all the transformation work that we’ve done since I got here,” Mr. Lynch said, “some of them early on did result in some staff reductions in certain areas, but it was really enabling us to invest in other areas of our business.”

Mr. Lynch said the job cuts would take place over the next few months. Condé Nast has about 5,400 full-time employees globally.

Hundreds of Condé Nast staff unionized last year, forming a group that covered workers at publications like Architectural Digest, Bon Appétit and Vogue. The union is currently negotiating its first contract with the company.

Sumber: www.nytimes.com