Jay Penske, the new owner of Variety, laid off nearly a quarter of the company's staff on Thursday.
Between 20 and 25 employees from the struggling Hollywood trade's circulation, database and conference departments were laid off. The editorial staff was not affected. Variety had about 120 employees before Thursday's cuts.
"Without a doubt, this is a challenging day, and I particularly wanted to notify and acknowledge those of you who will be saying goodbye to valued colleagues and friends," Penske, the CEO of Penske Media Corporation wrote in a memo obtained by the industry blog Deadline, which he also owns. "As we look ahead, Variety's business holds almost limitless potential and I will remain available to answer any questions you might have regarding today's changes and our future."
Penske bought the paper last month at the fire-sale price of $25 million. In his memo, Penske said that he planned to invest in the editorial and digital departments while trimming the database services and business branch.
The jobs eliminated came from the LA411 and NY411 units - directories for production resources - and its administration and conference units, according to the memo. Deadline said that the cuts totalled 20 to 25 employees.
Also read: Deadline Owner Penske Media Buys Variety
He also cut circulation staff, in what may presage a move to cut back on the paper's printing schedule. Variety currently prints daily during the week and a weekly edition on Friday.
TheWrap previously reported that Penske planned to maintain the print editoin and drop the paywall that blocked non-subscribers from reading Variety's site, placing it in direct competition with competitors like the Hollywood Reporter, TheWrap and its corporate sister Deadline. The paywall has since been torn down.
Neither Penske nor Variety returned calls or emails from TheWrap requesting comment.
Here's the full memo:
For the past six months, we have diligently reviewed every aspect of the Variety business. And in more recent weeks, we have outlined to Variety senior management an exciting and also aggressive trajectory for the brand's resurgence. These steps will include substantial further investment in editorial and digital, but will unfortunately require some immediate eliminations in the following business units: LA411/NY411, Circ, Systems, Conferences, and Admin.
Without a doubt, this is a challenging day, and I particularly wanted to notify and acknowledge those of you who will be saying goodbye to valued colleagues and friends. As we look ahead, Variety's business holds almost limitless potential and I will remain available to answer any questions you might have regarding today's changes and our future. As always, please don't hesitate to reach out to me, or see Tammy Chase to arrange an appointment.
Sincerely, Jay Penske CEO
- Jay Penske