While cut media company pay might be returning soon, confidence in the ad marketplace not on the horizon
Call it a modest sign that nature is healing in media: The pay cuts that many publications instituted at the start of the pandemic are starting to get rolled back.
In mid-August, Meredith announced that it would reinstitute full pay for employees beginning September 5. At an all-hands staff meeting in July, Condé Nast announced it too would roll back its own pay cuts beginning in the fourth quarter of 2020. BuzzFeed told staffers at the end of July that pay cuts implemented in late March would be phased out by the end of the year.
The cuts, which in many cases were tiered, reduced pay for junior staffers by a few percentage points and for senior managers by as much as 40%, and were a defensive move designed to limit layoffs. Though in most cases, the cuts did not prevent layoffs altogether: Almost every media company that announced pay cuts this spring also laid off or furloughed other staffers, according to a running tally of media’s cuts and layoffs maintained by Poynter.
The scope of the cuts also differed. Some publications, such as A.H. Belo, parent company of the Dallas Morning News, imposed the cuts on all salaried employees (A.H. Belo announced on a July 28 earnings call that it would restore full pay to all employees earning $60,000 or less). At publications such as Vice Media, the pay reductions only affected those in management roles, though the company halted other benefits for the rest of its workforce, such as 401k matching.
(Digiday Media, which had furloughs and pay cuts of its own, decided last month that it would roll pay back its cuts gradually as well)
In some sense, the choice of cuts, rather than layoffs, were the result of many workers trying to work together. “People were very receptive to the idea of shared sacrifice, even to the point that they’d start that conversation,” said Lowell Peterson, the executive director of the Writers Guild of America, East, which works with unions at publications including Vice Media and Vox Media. “Everyone was committed to the idea of shared sacrifice.”
While the return to normal pay shows that the bumpiest months of the crisis are over, sources at many of the publications that made cuts cautioned against overreacting.
“It’s more a function of having to provide the organization enough time to adjust expenses on the hit in advertising revenue, than the revenue coming back,” said an executive at one publication that had pay cuts, then rolled them back. “Ad investments have stabilized, but not returned to pre-COVID levels.
“There is a good chance they [the pay cuts] will have to be reinstituted in the future if ad spend remains depressed,” that source added.
While many publishers have found bright spots in a few different parts of their businesses, including programmatic advertising and an ability to work more closely with partners they already know, most media companies remain well off their original revenue projections for 2020.
Many ad sellers remain unable to have conversations with advertisers about the fourth quarter, as brands remain wary of committing to investments in a year when the economic, political and emotional outlook for the country keeps changing.
The digital advertising market as a whole, while expected to grow slightly in 2020, figures to be well off the original revenue projections for the year, according to eMarketer data. eMarketer has gone from projecting 16% growth to 1% growth.
Correction: An earlier version of this story said Meredith imposed pay cuts on its entire workforce. Only 60% of workers had their pay reduced.
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