Breaking News

The New York Times head of advertising says layoffs are 'likely' due to a decline in ad revenue — read the internal memo

Mark Thompson IGNITION 2015
  • The New York Times global head of advertising wrote in a memo that there will likely be layoffs in the ad department.
  • Advertising fell 15% in the first quarter due to the coronavirus slowdown, and CEO Mark Thompson has predicted that it would drop by more than 50% in the second quarter.
  • According to the memo, The New York Times expects to lean more heavily on ad revenue from companies in the tech and telecom sectors like Google and Verizon.
  • Click here for more BI Prime stories.
Layoffs are "likely" in the New York Times ad department due to ad revenue declines, according to a May 6 memo from global head of advertising Sebastian Tomich that was obtained by Business Insider.
A New York Times spokesman said the company does not comment on internal communications. Tomich did not immediately respond to a request for comment.

The Times predicted that ad revenue would drop by more than 50% in the second quarter

CEO Mark Thompson said during a May 6 earnings call that subscriptions, which make up the bulk of Times revenue, had surged during the coronavirus pandemic but that ad revenue declined by 15% in the first quarter. He predicted a drop of up to 55% during the second quarter.
Thompson said there would be cost reductions including "some job losses in coming months" but that the company expects "no such job reductions in journalism and none that would impact our core growth strategy." He did not say which departments would be affected.
In the memo to the ad department, Tomich, who oversees ad operations and the T Brand Studio, wrote that the company expects to see a concentration in revenue from advertisers in the tech, telecom, and financial services sectors.

The Times plans to rely more heavily on collaborations with tech and telecom brands like Verizon and Google

Chief operating officer Meredith Kopit Levien said on the earnings call that the Times would see more ad revenue from a smaller number of industries. Chief financial officer Roland Caputo said the decline in ad revenue was particularly stark in categories like entertainment and luxury.
Both Levien and Tomich cited Times' ad campaigns for Google and Verizon as a model moving forward.
Tomich wrote that "expected revenue declines mean some cuts are likely" but that leadership was not ready to provide details.
"I recognize that this may not be a satisfying answer, but it's the truth," he wrote.
The relevant portion of the email is reprinted below.
As we've received a few questions following the earnings call, I also wanted to address a specific point about ad categories. Meredith mentioned today the trend of a concentration of more revenue, from a smaller group of advertisers in categories like Tech, Telecom and Financial Services. We expect this trend to continue and we'll lean into big programs like those we've done with Google and Verizon. Our business also relies on a broad portfolio of advertisers across a range of categories and we will of course continue to support them. The reality is that some categories have faced outsized challenges in the pandemic economy, so we'll likely see less revenue from them during this time.
Lastly and what's likely on many of your minds, let me address the mention of potential staffing cuts. I want to acknowledge that hearing this is hard for many of us, and will lead to many questions. The reality is that our expected revenue declines mean some cuts are likely, but we don't know enough to be able to share any details. I recognize that this may not be a satisfying answer, but it's the truth.
SEE ALSO: 76% of companies plan to slash their advertising budgets this year — here's why their ad agencies could bear the brunt of the cuts
Join the conversation about this story »
NOW WATCH: We tested a machine that brews beer at the push of a button


* This article was originally published here Press Release Distribution

Source - https://www.businessinsider.com/prime

No comments