The Atlantic’s Layoffs

The venerable magazine is following industry trends. Is the billionaire owner a monster?

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A bizarre column by Jack Shafer in response to news of layoffs at The Atlantic yesterday: “Laurene Powell Jobs Wants to Be a Press Savior, Not a Martyr.”

Billionaires who are brave enough to enter the publishing space don’t mind losing money on it—they call it “investing”—until the day they do. That day came today for Laurene Powell Jobs, who has owned the majority stake in Atlantic Media since 2017, and whose management just laid off 17 percent of its headcount, cut pay for executives and put a freeze on salaries.

[…]

Laurene Powell Jobs, net worth $26 billion, could have preserved in perpetuity the 68 Atlantic positions she just jettisoned and never noticed the dip in her portfolio unless a forensic accountant alerted her to it. The fact that she noticed shows that, like the billionaires before her, Jobs keeps her eyes on her pennies and has only so much tolerance for loss. She’s happy to be a vanity press savior but not a martyr.

As Shafer later admits, Jobs actually increased the size of the staff during her tenure by 30 percent, so the 17 percent cut actually means the magazine is employing more people than when she took over the company. Further, most of the cuts are to staff supporting the company’s side business of running huge events—all of which have been canceled indefinitely because of the COVID-19 pandemic—and sales and video.

So, Jobs is willing to continue to subsidize quality journalism but not a department doing non-journalism and, indeed, doing nothing for the foreseeable future. How does that make her a villain?

For that matter, it’s not obvious why billionaires are somehow obligated to employ people doing things that can’t be done. That’s not a private responsibility. And the company is purportedly paying “generous severance packages.” That’s more than most of the tens of millions of Americans whose jobs have been wiped out by the pandemic are getting.

Last fall, well before the contagion announced itself, the Atlantic erected a paywall and began to push harder for subscriber revenue, which produced reports of success from Editor-in-Chief Jeffrey Goldberg. Jobs was clearly signaling then that she didn’t mind subsidizing your reading habits, but that she wasn’t prepared to foot the whole bill.

[…]

Vanity press moguls tend not to give up their media businesses all at once but in stages, as I’ve written before. That said, I see nothing in today’s announcement that hints that Jobs has grown weary of the media game after three years playing it, or that she is making plans to flush the Atlantic. But the layoffs and the paywall suggest that while she’s happy to subsidize the enterprise, like other vanity press moguls before her, she’ll be damned if she’s going to make a gift of her magazine to the masses. If you really want your Atlantic, her layoffs seem to be saying, you will have to pay for it.

Well, um, yes?

I’ve subscribed to the magazine off and on for three decades. I’ve even written quite a few pieces for their website. I really hope they’re able to survive.

But the fact of the matter is that most of these magazines have been money losers forever. Historically, they lavishly paid their writing staffs, who traveled first class wherever they went, and took losses year after year.

And things have gotten decidedly worse for the industry, as print and online advertising has all but dried up.

To make matters worse, as I’ve noted before, the fact that advertisers aren’t subsidizing the cost of production and distribution any longer mean that the cost of subscribing has skyrocketed, presumably diminishing readership.

I don’t have any strong views on Ms. Jobs, of whom I’d never previously heard. She’s Steve Jobs’ widow. But it strikes me as perfectly reasonable for her to only subsidize the parts of the business she wants to subsidize.

FILED UNDER: Economics and Business, Media
James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. MarkedMan says:

    Good take, James

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  2. OzarkHillbilly says:

    As much as I want to, because of my innate antipathy for the filthy rich, I can’t really disagree either.

    I has a sad. 🙁

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  3. Sleeping Dog says:

    There is something inherently wrong with the fact that important idea and analysis outlets need to be kept alive by an indulgent billionaire, but it has always been so. The New Republic would have died decades ago if not for a succession of wealthy patrons and the Weekly Standard was killed, when its plutocrat became disenchanted with the journal’s philosophy.

    Jobs’ isn’t wrong in shutting down a non-performing line of business that was distinct from main purpose of the organization. The events division only existed due to the glow generated by the ideas portion of the organiztion.

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  4. wr says:

    “For that matter, it’s not obvious why billionaires are somehow obligated to employ people doing things that can’t be done. That’s not a private responsibility”

    Ah, here is the great American game as it should be played:

    Step one: We must cut taxes to return power to the private sector, instead of the incompetent government. And when the billionaires are able to control their own money, then individual acts of charity will easily replace the shredded government safety net.

    Step two: “For that matter it’s not obvious why billionaires are somehow obligated” to replace the safety net programs that were slashed so they could keep more of their money. “That’s not a private responsibility.”

    Not to say that The Atlantic has relied on government funding, or that I give a damn what happens to the even-the-liberal-the-Atlantic. But this is a beautiful example of the tw0-step that allows Republicans to destroy the very notion that this country exists for anyone but the very richest.

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  5. James Joyner says:

    @wr: That the wealthy are allowed to deduct charitable contributions from their taxes certainly increases charitable contributions. And Americans tend to donate more to charity than those in other countries (although a lot of that is to churches).

    I’m agnostic over whether it’s a great idea that charity and investment are so beholden to the ultra-rich and their foundations. There are likely ways in which Bill Gates, the Ford Foundation, etc. are making better investments than we’d make through the bureaucratic and/or political processes but it also means charity depends on the whims of these people.

    But I don’t know that I’ve ever heard a conservative argue that we should give tax cuts to the wealthy so that they’ll keep unproductive parts of their businesses going.

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  6. Kathy says:

    For that matter, it’s not obvious why billionaires are somehow obligated to employ people doing things that can’t be done. That’s not a private responsibility.

    This is true. And it’s also what we need to understand in order to stop fetishizing the rich and the well-off as “job creators.” Jobs are a side effect of their effort to make money, as is purchasing raw materials, packaging, tools, etc., and paying for water and electricity.

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  7. Lounsbury says:

    @Kathy: That (economically useful and sustainable) job creation is a side effect rather than a direct objective of said efforts is 100% besides the point relative to the rationale for ‘celebrating’ that aspect. It is immaterial to the concept or effect celebrated as it were.

    Like anything there are diminishing returns and a religious like approach to the subject, or if I may a Bolshevik party line approach is unhelpful.

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  8. mattbernius says:

    Further, most of the cuts are to staff supporting the company’s side business of running huge events—all of which have been canceled indefinitely because of the COVID-19 pandemic—and sales and video.

    This part is critical. I’ve been to one Atlantic event and it was incredibly well produced. The goal was to produce content for the magazine and build the brand. But the events space has fundamentally changed and maybe one of those areas that doesn’t ever get back to pre-C19 (or at least not for a year or two). I help plan two different annual conferences and both are not sure what their futures will be. One has gone fully remote (though we’re still asking what that looks like). The other may just not run.

    So this is a pretty unique set of circumstances and these cuts are understandable based on the current facts on the ground.

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  9. Just nutha ignint cracker says:

    @wr: I see the 2-step process that you describe clearly enough. An example on the liberal side is the types of short-term grants given to states that created the term “unfunded mandates.” I object to both versions of the scheme, but I don’t see this move by Jobs as particularly exemplary of it.

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  10. CSK says:

    Over at The American Thinker and Lucianne.com, Cult45 is salivating with joy at this news.

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  11. Tyrell says:

    Our family had Life, Time, National Geographic, Smithsonian, Mad Magazine, Cracked, Popular Mechanics, Business Week, and Sports Illustrated. We got Hot Rod when I got into cars and racing. The last subscription I had was NHL Hockey. The only time I see any magazines now is at the grocery stores and doctors’ offices. that There are many more magazine selections now, and some in the form of non-fiction information: Civil War, Famous Haunted Sites, Famous Mysteries, Sharks, Computer Coding for Beginners, Stock Investing, and so on. Those run around $25.
    As soon as school starts every year the students go around with their first of many fundraiser campaigns. They sell cookie dough (really delicious), jewelry (sells very well), and magazine subscriptions (those do surprisingly well). Most of the fundraiser money goes for technology – new Chrome books. Copy paper and toner are second. No doubt about it, fundraising companies make big money from the schools.

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