Parts of U.S. media are laying off hundreds of journalists.
The Messenger, a U.S. online news site that promoted itself to deliver unbiased and trusted news, abruptly shut down Wednesday after eight months of operation.
Jimmy Finkelstein, the founder of The Messenger, sent an email to its over 300 employees announcing the immediate shutdown.
In his email, Finkelstein said he did not share the news earlier with employees because he had been trying to raise enough funding to become profitable, according to The Associated Press. The New York Times was the first to report the news.
“We exhausted every option available,” Finkelstein wrote in the email, saying he was “personally devastated.”
News of The Messenger’s end comes after a brutal month of media layoffs: The Los Angeles Times, Forbes, Time, Sports Illustrated, Tech Crunch, NBC News and Business Insider all recently announced cuts to their staffs.
The shutdown comes amid weeks of bad media news. The Los Angeles Times recent lay off has been followed by Time and Insider. The Wall Street Journal announced a restructuring on Wednesday that would result in a number of layoffs in its DC bureau.
An AP report said:
On Friday, the National Press Club is offering solace — and a free meal — by giving recently laid-off journalists tacos in recognition of a brutal stretch that seems to offer bad news daily for an already struggling industry.
For anyone who works in the news media, the list is intimidating — and unremitting.
The news website The Messenger folded on Wednesday after being in operation since only last May, abruptly putting some 300 journalists out of work. The Los Angeles Times laid off more than 100 journalists in recent weeks, Business Insider and Time magazine announced staff cuts, Sports Illustrated is struggling to survive, the Washington Post is completing buyouts to more than 200 staffers. The Post reported Thursday that The Wall Street Journal was laying off roughly 20 people in its Washington bureau; there was no immediate comment from a Journal representative. Pitchfork announced it was no longer a freestanding music site, after digital publications BuzzFeed News and Jezebel disappeared last year.
And journalists at the Los Angeles Times, the Washington Post, New York Daily News and the Conde Nast magazine company have all conducted walkouts to protest how management was dealing with business problems.
Seeing all the damage is what led to the Washington-based National Press Club to open its weekly Taco Night to laid-off colleagues and offer a one-month free membership to people who need a networking opportunity.
“It’s very important when people have lost their jobs to know that they have some support behind them,” said Didier Saugy, the club’s executive director.
Media reports said:
The Messenger received $50 million in investor money in order to launch in May 2023 with hopes of growing its newsroom relatively fast. With experienced journalists joining their team, Finkelstein’s plan was to bring back the old days of journalism that he and his family once shared.
Finkelstein’s business model was criticized by many and called outdated, according to the AP.
As of Wednesday, the website only included the company’s logo with an accompanying email address.
Here’s a look at other media outlets who are starting this year off by slashing staffers from the payroll.
The Los Angeles Times
The Los Angeles Times announced Jan. 23 it was laying off 115 employees, more than 20% of its newsroom.
The cuts were necessary because “the paper could no longer lose between $30 million to $40 million a year” without gaining more readership through advertising and subscriptions, Times’ owner Dr. Patrick Soon-Shiong said in a story about the layoffs from the newspaper.
“Today’s decision is painful for all, but it is imperative that we act urgently and take steps to build a sustainable and thriving paper for the next generation. We are committed to doing so,” Soon-Shiong said in the article.
Sports Illustrated
The Arena Group, which operates the Sports Illustrated brand and its related properties, announced on Jan. 19 it was laying off more than 100 employees as it was in “substantial debt and recently missed payments” and was moving toward a “streamlined business model.” The company also said Authentic Brands Group revoked its license to publish Sports Illustrated.
On Monday, The NewsGuild of New York and the Sports Illustrated Union announced they are taking legal action against The Arena Group after the massive layoffs.
The two union organizations accuse The Arena Group of terminating employees “because of their union activity.” The groups say every member of the Sports Illustrated Union was told it would be laid off, but supervisors and managers kept their employment. The unions also say while most employees were given 90 days notice of termination under New York State law, some employees were immediately laid off. As a result, The NewsGuild of New York filed an unfair labor practice charge against The Arena Group.
NBC News
NBC News laid off several dozen staffers at the beginning of the year, USA TODAY confirmed.
A source familiar with the plans said that employees were given a 60-day notice and will get severance packages and outplacement.
The layoffs at NBC News, first reported by Puck News, were the latest in an onslaught of cuts made in the journalism industry throughout 2023, including by NBC News, which slashed 75 jobs this same time last year, according to a timeline provided by Forbes.
Blank White Screen Website
An NBC News report said:
The Messenger’s website was a blank white screen with only the words “The Messenger.” In black text with an email address Wednesday evening. No articles, current or past, appeared there.
The Messenger launched in May with Jimmy Finkelstein, who previously owned The Hollywood Reporter and The Hill, at the helm. It promised to provide “thorough, objective, non-partisan, and timely news coverage” in a time of bias and misinformation.
An email that was sent to staff members signed by Finkelstein, which was seen by NBC News, said it was a “painfully hard decision” to shut down “effective immediately.”
“Over the past few weeks, literally until earlier today, we exhausted every option available and have endeavored to raise sufficient capital to reach profitability,” the email said. “Unfortunately we have been unable to do so, which is why we haven’t shared the news with you until now.”
“This is truly the last thing I wanted and I am deeply sorry.”
The email included an attached “Frequently Asked Questions” document telling employees that there would be no severance and that the last paycheck would be on Jan 31. Laid-off employees would also be eligible for COBRA health coverage beginning Thursday.
Jordan Hoffman, a film critic at The Messenger, wrote on X that the last message he saw before he was kicked out of the company Slack account was from a colleague wondering about health insurance coverage for a coming operation.
“All I know is that if I were to launch a media start-up I’d be sure to rent an entire floor of a downtown Manhattan skyscraper that was 9/10ths empty all day … and then fail to tell my employees they were laid off until they read about it in the New York Times,” Hoffman wrote in another post.
Semafor reported this month that The Messenger’s board was considering shutting down the website as the outlet was set to run out of money by the end of January. A spokesperson denied the claim to Semafor, saying additional funding had already been secured.
A day before staff members were informed that they were now without jobs, the New York Post reported that Finkelstein was working to secure deals to inject new revenue into The Messenger to keep the site going.
The Nieman Journalism Lab cast doubt on claims by leadership that The Messenger would deliver on its hopes to draw 100 million monthly unique visitors and eventually support a 550-person staff. A Nieman article published shortly after The Messenger launched noted that the vast majority of its content appeared to be quickly aggregated material over originally reported articles.
In one hour tracked by Nieman, The Messenger published 27 stories, in comparison to just nine at The New York Times.
Unionized workers at Condé Nast staged a single-day work stoppage last week over what the News Guild described as the company’s “unlawful” negotiations over proposed layoffs.
This article was originally published on NBCNews.com
Who Killed The Messenger?
The Wrap said in a report:
The sudden shutdown of Jimmy Finkelstein’s The Messenger on Wednesday was the latest distress signal from the world of digital news media, where the business model of traffic-for-advertising has proved to be unsustainable.
Despite the failures of BuzzFeed and Vice among others in 2023, Finkelstein still spent profusely to launch a start-up he was convinced could buck the trend. He offered salaries that were two and three times market rate for journalists in order to fill a newsroom that could make an instant impact on the marketplace, offering supposedly apolitical news to a nation that was already consuming its news on TikTok.
When the end came, staffers were not offered so much as a day of severance.
“We delivered beyond expectations in just seven months – with the traffic results to prove it,” said editor-in-chief Dan Wakeford in a farewell message that reflected exactly the flawed business logic behind the company.
To its credit, The Messenger had 11 million unique visitors in December 2023, according to Comscore, and a massive 89 million page views. But that was an insufficient amount to sustain a newsroom of 200 people. And it was a business model that had been abandoned by most in digital media in favor of lightweight newsletters and subscription like those offered by Puck and Semafor.
The Lure of Web Traffic
The report said:
In the last two decades since venture-backed digital media sought to challenge traditional media outlets, Big Tech companies have tightened their stranglehold on digital advertising, choking off the revenue pipeline that sustained digital businesses.
Google and Meta have led the way in swallowing the traffic-driven business model, with dire consequences for all media outlets, but especially those that relied on traffic from those partnerships. Google, Meta and Amazon now account for about 60% of all online advertising revenue.
The results have been devastating for a series of digital news businesses, including Vice Media, which declared bankruptcy in 2023 and BuzzFeed, which effectively shut down news and pivoted to e-commerce. Hundreds of jobs were lost in those closures.
In an environment where legacy news media are also cutting staff by the dozens, digital media now faces a true crisis.
Meanwhile, January 2024 has proved to be devastating for legacy media outlets that have seen direct advertising plummet and the stall-out of subscriptions, including The Washington Post, which cut 240 people from its newsroom, The Los Angeles Times, which this month slashed 120 newsrooms jobs, or about 20% of its staff; Sports Illustrated, which laid off its entire staff of about 100 under a new owner; and Time Magazine, which had significant layoffs.
Small Are Surviving
Still, not all digital start-ups are in freefall. Smaller, more-focused outlets that have formed in the past two years, including Puck News and Semafor, are surviving and even thriving because of models that are largely free from interference from Google and Meta. Puck began essentially as a newsletter and a podcast, while Semafor started as a website and is a collection of newsletters. While Puck relies heavily on subscriptions and event sponsorships, Semafor is currently free to access and still relies on advertising along with event sponsorship. Both news sites are geared toward educated, affluent audiences.
Messenger Missteps
The report added:
Finkelstein told the New York Times in March that he planned to hire 500 journalists and build a website to emulate journalistic institutions like “60 Minutes” and Vanity Fair.
With previous experience investing in publications like The Hollywood Reporter and owning The Hill which he sold to Nexstar for $130 million, Finkelstein attracted $50 million in investments for the untested start-up. But the business, based entirely on digital ad revenue, burned through $38 million during eight months of operation in 2023, and generated only $3 million in revenue. Those close to the platform’s investors confirmed the figures to TheWrap in early January.
Among the expenditures were more than $8 million spent on multiyear leases in offices in Florida, Washington D.C., and New York City.
Two insiders at the start-up blamed president Richard Beckman for much of the overspending on offices. Its massive New York City base was housed in a tony Financial District building in downtown Manhattan, above the high-brow Japanese restaurant Nobu.
The Messenger signed a 41,854-square-foot sublease with Orchard Technologies for the 25th floor at L&L Holding Company’s 195 Broadway, insiders told TheWrap.
One former staffer speaking on condition of anonymity said that The Messenger started in a modest WeWork space in Midtown Manhattan before Beckman went on a “massive real estate spree. He was acting like money was no object. He very much misrepresented the financial situation of the company in terms of revenue.”
After Beckman announced his exit on Jan. 2 on LinkedIn for health reasons, cost cutting began, including 20 layoffs. Beckman initially projected The Messenger would make $100 million in 2024.
Travel, meals and entertainment expenses at The Messenger were estimated to be more than $1.7 million by the end of 2024.
Even as advertising budgets were being cut throughout 2023, the company blindly staked its future on a massive ad turnaround, forecasting it would bring in more than $18 million in direct ads and $37 million in programmatic advertising, it said in a document to investors.
Neither Finkelstein nor Wakeford responded to phone calls from TheWrap on Wednesday.
The Final Weeks
The report said:
The Messenger insider described the last month at the start-up as “a sea of confusion” for staffers.
Finkelstein said he was aggressively seeking extra funding, but he was not updating his staff, fearing further leaks to media, which he claimed were damaging his hopes of obtaining further investment.
“The editors urged reporters to keep their heads down and keep working despite the huge anxiety gripping the entire workforce,” a source said.
Now 270 people have lost their jobs, 200 of them journalists, and sources say there will be no severance pay.
While there was some original reporting and scoops, such as Taylor Swift quietly hanging out with Travis Kelce before the rest of the internet and Swiftysphere knew, journalists complained about being asked to mass-produce stories picked up from other outlets.
“Now that the cat is out of the bag, let me tell you something,” wrote laid-off staffer Eli Walsh on X. This company worked its news and audience reporters to the bone over the last eight months. I wrote 630+ stories in that time, most of them were just copying and pasting work that other reporters put time (into).”
He added: “I do not know what is next right now, but I will tell you one thing: I have no usable clips in eight months’ time because of this editorial strategy. Zero. Not one.”
Up to the end Finkelstein had remained buoyant about raising more money. He said he raised around $8 million at the end of 2023 and said he was raising another $10 million in January.
Finkelstein had also explored selling a $30 million majority share of The Messenger to a group of conservative investors. They included Omeed Malik, a financier who backed Tucker Carlson’s new media venture; Garrett Ventry, a Republican political operative; Ryan Coyne, the CEO of digital media company Starboard; and George Farmer, who sits on the board of Britain’s conservative news network, GB News, TheWrap previously reported.
It would never come to pass. In a message to staff on Wednesday, Finkelstein said: “The industry has faced extraordinary challenges this past year. The economic headwinds have left many media companies fighting for survival. Unfortunately, as a new company, we encountered even more significant challenges than others and could not survive those headwinds.”
The Final Hours
The report added:
After a Jan. 3 Semafor story reporting the outlet’s board had weighed a shutdown over cash shortfalls, staffers were expecting the axe to fall soon. But they were still shocked with the abrupt way they learned the site was out of money: They were unceremoniously booted out of the company’s Slack app, many while still midstory.
“The last thing I saw in The Messenger’s Slack was a panicked colleague writing, ‘Wait, what about our insurance coverage, I have a surgery boo—’ and then we all got booted out,” Jordan Hoffman, a senior writer and critic said on X.
Like most of The Messenger’s staff, Hoffman found out about the shutdown from the New York Times, while another now-jobless writer first learned about it when TheWrap reached out for comment.
One editor who wanted to remain anonymous told TheWrap that he felt management strung along staffers until the very last minute.
“They kept us on the hook until we found out today from all the other publications, which was obviously a gut punch. You know it is coming and to find out somewhere else, it deeply hurts,” the individual said. They added that as late as last week, they were expecting good news, based on management’s “business as usual” attitude.
“[Employees] were rightfully upset because they had told us last week that they were going to give us an official update,” this person said. “I thought that they were going to find the funding because they were very much like ‘keep up the good work.” Like ‘hint, hint, it’ll be okay.’”
“Impossible to overstate how cruel the leadership was in how this went down. We just kept hearing more dires— from other outlets without a word from them. They kicked us all off slack today *before* sending an email confirming the news,” Dave Levitan, a climate and science reporter, wrote on Bluesky.
The West Coast editor agreed that The Messenger was overstaffed and that a lot of those staffers were overpaid. Among those laid off was Hallie Steiner, who actor Jon Cryer noted on X was his niece.
Another staffer said Messenger employees had already been planning a get-together for after the layoffs, “but we were planning it on [the company’s] Slack.”
The Wrap report said:
Amid the pain, Hoffman joked about the probability of the site’s drama being mined by Hollywood. “I can’t wait for the Hulu series about The Messenger dot com,” he said. “You won’t believe some of the wacky s–t that went down there. I only hope they cast Zac Efron as me.”
‘I Just Got Laid Off’
A report by The Guardian said:
Within hours, the Messenger’s website had been wiped blank, shocking the publication’s hastily laid-off reporters, who had been trying to share links to their work as they suddenly searched for new jobs. Former Messenger journalists and writers from other news organizations criticized the company’s owners for the swift website takedown, calling it disrespectful to former employees.
A homepage that hours before had featured dozens of news, business and entertainment headlines later read only “TheMessenger”, with a generic email address.
The company once had grand ambitions, projecting it would bring in $100m in revenue in 2024 after bringing in only $3m in 2023. Potential investors were informed the company had only $1.8m in cash near the end of last year, according to the New York Times.
The Messenger went through most of the $50m it had raised before launching. The news took some of the 300 reporters, many of whom had been hired from national outlets, by surprise. Some tweeted that they had found out the site was shutting down from news reports.
No Severance
The report said:
Many employees were left with little information about the shutdown. Some tweeted that they would not be receiving severance and that their insurance would be cut off. Even the site’s editor-in-chief, Dan Wakeford, had not been aware the site was shutting down, according to the Daily Beast.
“I am not in the loop. Trying to find out now,” he wrote in an internal Slack message.
Some of the journalists briefly employed at the publication suggested there was more to criticize, including the amount of money the company had spent on its corporate offices. The New York Times reported it had spent $8m on multiple offices, including in New York and Washington DC.
Jordan Hoffman, a senior writer and critic for the site, compared the company’s run to the disastrous Fyre music festival, which was chronicled in several documentaries, writing: “I cannot wait for the Hulu series about The Messenger dot com. You would not believe some of the wacky shit that went down there.”
