It's only been a month since Jay Penske, the CEO of Penske Media Corporation, purchased Hollywood trade publication, Variety, for $25 million.
And now Penske, who also owns Nikki Finke's rival publication Deadline, laid off between 20 and 25 people from the 165 person staff, it was announced Thursday.
While the lay offs were from the database and conference departments and at sister brand LA411/NY411, the editorial side was, for now, unaffected by the changes.
But the lay offs appear to be a part of Penske's master plan, as he says he plans to further invest in editorial and digital.
Penske also plans to abolish the online pay wall that prevents nonsubscribers from reading articles — putting them in direct competition with free rival trades such as The Hollywood Reporter, TheWrap and its corporate sister Deadline.
In a memo that went out to staff and was later posted on Deadline, Penske writes:
Dear Team
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
Before Thursday, the only major move Penske had made was the appointment of sales executive Michelle Sobrino-Stearns as publisher of daily and weekly Variety.
In addition to the lay offs, Daily Variety is expected to cut back its printing schedule, though it's not yet known by how much.
SEE ALSO: Destroyed By Blogs, "Variety" Magazine Will Sell For Less Than $30 Million >
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