Job cuts speculation mounts ahead of Yahoo7 staff meetings
Speculation continues around the scale of Yahoo7’s planned redundancies following yesterday’s ambiguous press release stating the company was restructuring to increasingly use the Oath technology platform.
Yahoo7 confirmed to Mumbrella that chief revenue officer, Paul Sigaloff, would be remaining with the company, but declined to make any further comment on redundancies ahead of staff meetings, which Mumbrella understands will be taking place later this week.
Multiple sources have told Mumbrella staff are concerned about the scale of the cuts and remain unsure which departments will fall under the axe. Mumbrella understands some staff have had meetings around the redundancies scheduled, while others remain in the dark.
A spokesperson told Mumbrella: “Due to the nature of his role, we can confirm Paul Sigaloff is staying with the business. We will not be providing comment on any other individual. Our focus currently is on managing this process with our people.”
Concerns about the future of Yahoo7 in Australia have been ongoing since US telecommunications giant Verizon completed its US$4.48b deal with Yahoo in the US on June last year. When Verizon acquired Yahoo, it was merged with AOL to create digital media company Oath.
At the time, Yahoo7 – which is now jointly owned by Verizon subsidiary Oath and Seven West Media – said the joint venture would continue and include a broader content set. Seven West Media, however, then said it would launch and market its own long-form video platform and streaming service– which has subsequently been revealed as 7 Plus.
Seven’s chief digital officer, Clive Dickens, told Mumbrella at the time no other part of the JV would change. He also said he had no concerns for Yahoo7’s revenue after the removal of the catch-up service.
In yesterday’s release, Yahoo7 stated its editorial team would continue to deliver “premium, unique and engaging content in the news, sport and lifestyle verticals” and that its sales team would continue to give clients access to audiences through platforms such as Gemini and Brightroll.
Since 2014, Yahoo7’s revenue and profit have been under pressure with the ongoing weakness in online display advertising. Seven West Media said in last year’s annual report: “after factoring in the impact of display, total net revenue declined 16% in the period.”
Yahoo7’s Standard Media Index (SMI) figures – a measure of agency ad spend with the exclusion of IPG Mediabrands – have also fallen, down from $75.807m from Jan to Dec 2015, to $55.027m in the calendar year from January to December 2016. In January to December 2017, that number fell to $37.723m.
In September last year, Yahoo7 had seen a year-on-year decline of 23%, a loss of almost $15m.
A spokesperson told Mumbrella: “SMI data is misleading and does not provide an accurate indication of the financial health of our business. It does not reflect a large portion of our revenue, given our global proprietary ad platforms and technology, which have grown materially year on year.”
Yesterday Seven West Media’s capitalisation fell to its lowest point in its ASX history, with a market capitalisation of $784.18m. At the time of publication this morning, the share price had recovered slightly to 54 cents with a market cap of $806 million.
Hope they get a job somewhere soon
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They won’t be the only media company making people redundant this year. Cuts underway at others right now but haven’t hit the headlines.
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Like media companies around Europe SWM will continue have declining revenue and profit. I follow Mr. Clive Dickens on Twitter and although he knows lots about what going on in the world of media; how media consumption works and is transitioning, it is very superficial and focussed on audiences sizes. To me these are vanity metrics that put a curtain in front of the real results, which are declining revenue and profits. The real and simple issue stays that a real and fundamental shift in vision on their business models is not there. It is still either subscriptions to print and advertising that bring in the biggest bucks. And those streams are ending or will never return to where they once were. My advice to Clive, first: decrease the size of SWM rigorously, stop focussing on vanity metrics, stop click bait and think of what SWM in it’s core is; a media company that people read, like or use because of the content, not the advertisements. Than start creating a vision on how SWM can make a real shift in business model (Washington Post build a CMS so good it’s marketable and became a tech company) and be okay with failing. Failing equals learning, it is not losing.
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