Digital media startup Vice lays off “several hundred” employees

Millennial-focused and known for edgy news and lifestyle content, Vice was among the rising stars of a new generation of digital media companies, but struggled as advertising revenue shrank.

The move is the latest bit of depressing news for America’s struggling media industry, which saw BuzzFeed News close last year after 12 years in business.

“With this strategic shift comes the need to realign our resources and streamline our overall operations at Vice,” Bruce Dixon, chief executive officer of Vice Media Group, told employees in a memo, copies of which were posted on internet by several Vice reporters.

“Unfortunately, this means we will be reducing our workforce by eliminating several hundred positions.”
Dixon said it’s “no longer cost-effective for us to distribute our digital content the way we did in the past.”

Going forward, the company “will look to partner with established media companies to distribute our digital content, including news, on their global platforms as we fully transition to a studio model,” he added.

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Employees affected by the layoffs will be notified early next week.

It marks a dramatic decline for a plucky upstart media company that was valued at a staggering $5.7 billion six years ago but ended up filing for bankruptcy last May.

The following month, a group of creditors led by Fortress Investment Group took the company for a relative song, to the tune of $350 million.

Many digital media startups have not been able to convert their brand enthusiasm into the kinds of revenue that investors had predicted.

A slowdown in the online advertising market and tighter credit conditions last year made it increasingly difficult for relatively new media companies like Vice.

Vice was founded in 1994 as a Canadian magazine and has grown into an online media group with news websites and television operations.

He cultivated a “bad boy” image and his success caught the attention of the media world as he connected with young audiences.

But in 2018 co-founder Shane Smith stepped down as chief executive after the group was dogged by reports of workplace harassment, which led to the sacking of three employees.