Quartz shrinks UK commercial team, citing revenue ‘slow-down’ due to Brexit
In the past year, Brexit and GDPR have stirred up unusually choppy water for publishers in the U.K. Now, their currents are claiming some casualties.
Last week, Quartz told the commercial division of its U.K. office that it would be eliminating four jobs. Those four positions represent nearly one-fifth of Quartz’s U.K. commercial team, which totals 19 people. Quartz’s overall headcount is more than 240 people worldwide.
When reached for comment, a Quartz spokesperson emailed the following statement:
“Quartz’s UK team has consistently contributed to the company’s growth since the beginning. It’s only been in the last year that the UK team, which was responsible for nearly 25 percent of the company’s total ad revenue in 2017, experienced a slow-down in 2018, which we attribute to a number of factors, some of which are out of our hands, like the business uncertainty in the face of Brexit. Additionally, we’re implementing new strategies that allow us to focus on larger partnerships in the UK market, which we expect will reverse this short-term trend.”
Those potential cuts are unusual for Quartz, which has mostly managed to avoid layoffs through its six-year history. The company’s overall business is also on the rise, with 2018 revenues up 25 percent year over year, according to a person familiar with the publisher’s finances. It also intends to increase its headcount in 2019, to 280, that person said.
But Quartz’s decision to shrink part of its U.K. commercial team is a testament to the scope of the challenges to the U.K.’s media sector, which IAB UK CEO Jon Mew described last fall as “the most uncertain economic and regulatory climate the digital sector has ever seen.”
Though Brexit’s deadline is just two months away, it remains unclear whether the separation from the EU will take place, and what form it might take. The U.K. industries facing the greatest uncertainty include the finance sector, which is a big focus area for Quartz’s commercial team.
The rate of digital ad growth business is beginning to slow down in the U.K. Growth in advertising was expected to be its lowest in three years, according to the most recent quarterly report released by the U.K. trade group Institute for Practitioners of Advertising. In the report, 21 percent of respondents said they expected budgets to increase (18 percent said they expected budgets would decrease).
Brexit uncertainty is not the only thing making British publishers’ lives harder. Nearly one-third of respondents to a Digiday+ research poll said that Europe’s General Data Protection Regulation had negatively affected their programmatic revenue, while another 29 percent said they were unsure if the regulation had affected their programmatic revenue.
GDPR doesn’t impact Quartz as much as other publishers, in part because it relies on branded content for ad revenue. But the twin storms of GDPR and Brexit are likely to create further difficulties for publishers in the year ahead, particularly as confusion continues to hang over Britain’s attempts to extricate itself from the European Union.
“Uncertainty’s bad for everybody,” said Stefan Tornquist, svp of research at Econsultancy, of Brexit’s likely impact on U.K. publishers. “And it appears to me that it’s only going to get more uncertain.”
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