Quartz CEO Seward: We’re closing office spaces, execs cutting salaries by 20%

Quartz CEO Zach Seward sent out the following to the staff regarding the layoffs and restructuring:

Hi, Quartz

Thank you for joining our meeting just now. Here’s a transcript of my remarks.

From the start of this crisis, I’ve wanted to give you all a definitive assessment of what it would mean for Quartz, beyond the incremental updates I’ve been sharing at our town halls. But amid so much uncertainty and not wanting to make a hasty decision, it has taken time. You have all done an amazing job at carrying on and adapting to this new reality in the meantime.

Today I can share a definitive update. This is no doubt the greatest challenge we have faced as a company. It’s hard to conceive of this moment even as it arrives, thinking of everything—and more importantly, everyone—that Quartz has become in our eight years. That weighs on me heavily, as it should. But I have made the very difficult decision to eliminate about 80 roles at Quartz and make other changes in order to improve the health of our business.

Quartz has only ever been the sum of all the great people who work here, and that will make today’s news especially hard. We are losing many amazing colleagues, and it’s happening at a time of enormous personal challenge for everyone. We’ve done our best to make the process of these layoffs as fair and humane as we can. That is our most important obligation right now.

The decision

I will talk about the process from here, but first, I want to explain the reasoning behind this decision. You all have the general picture of our business already: Membership is growing at a record pace, with 17,680 paid subscribers at the end of April, a great signal of our value to readers. Still, advertising accounts for the bulk of our revenue, and that business has been hit very hard by the effects of coronavirus. Even after the pandemic recedes, the likely recession to follow could hurt ad revenue for years to come. Prior assumptions about our business no longer apply.

So in thinking about how to respond to this moment, I had to consider not just the immediate impact of coronavirus but fundamental aspects of our strategy. What are Quartz’s strengths? What is working to grow membership? What is the most valuable part of our ad offering? And what do we need to thrive in the years to come? With these questions in mind, I worked with the rest of the executive team to hone our strategy, figure out what was necessary to pursue it, and devise a new budget that would still meet our commitment to become profitable by 2022.

Our strategy is to focus on what Quartz does best, which is analysis of global business and economics for our audience of young, ambitious professionals. The business model will still be a mix of subscription and advertising revenue, but as a smaller and more-focused company, we’ll only do those things that serve Quartz’s core. We’ll talk about all this in more detail next week.

I should emphasize that today’s changes are about sustaining Quartz for years into the future, not just surviving the current crisis. If we are to be a healthy company, we can’t just make periodic cuts and try to scrape by. It was important to me that we take just one, decisive action that could confidently carry us into a sustainable future. Unfortunately, that meant some alternatives to layoffs, such as furloughs or across-the-board pay cuts, were not an option. They would not have saved enough money or corrected our business model for the long run.

Still, I never want to eliminate jobs if we can avoid it, least of all in the current environment, and so we looked for every other responsible way to save money first. I have cut my own salary by 50% for the remainder of the year, and the rest of our executive team—Katie Weber, Tomo Ota, and Katherine Bell—are voluntarily cutting their salaries by 20%, as well. We have also decided to close our physical offices in London, San Francisco, Hong Kong, and Washington, DC, over the next few months as those leases expire (but to be clear, we will continue to employ people in all of those cities and beyond), and we are exploring how to reduce our rent in New York. And we have already reduced a wide range of other costs since this crisis began.

Those savings alone, however, aren’t enough to control our losses or sufficiently correct our business model, so I reluctantly concluded that much more significant changes were necessary.

Selecting roles

Today’s layoffs will touch every team in the company, but not evenly. In making decisions about roles to eliminate, I focused primarily on what would be needed to pursue our strategy. Our subscription business, of course, was the most important consideration: How do we best serve members with our core coverage of business, economics, and finance? For the ad business, I privileged the roles required for a more focused and efficient version of our current offering.

If your job is not included in that future, it is not a judgment on you. We are saying goodbye to many excellent people who have done great work at Quartz. It is simply a stark reflection of the dynamics of digital media in this difficult moment. To determine what roles would be eliminated, I took advice from some other leaders in the company, but ultimately, these were my decisions.

As part of these changes, some people who remain with the company will have new jobs, and we will update our org chart. If you have a new job or a new boss, your department head will let you know over the next few days. I’m sure there will be plenty of questions about what the new company will look like, but our first priority today is communication with affected employees.

I have a lot more to say about our strategy and how we will focus Quartz following today’s layoffs. We’ll come together as a company again on Monday to talk about strategy and take your questions, and individual teams will have meetings, as well. But today and tomorrow, our focus is simply on supporting everyone at Quartz as best we can.

Process from here

Here is how today will go: It’s important that anyone whose job is impacted has an opportunity to hear that news first-hand, to meet with a manager, and to ask questions, even though all of this needs to be done remotely. So after this meeting, the people operations team will start sending out calendar invitations for those conversations. If you don’t receive an invitation by 11:30am EDT, then your job is not impacted.

The process from there will vary by country. For employees in the US, we intend to meet today with everyone who is leaving Quartz. The last day for most of those people will be tomorrow, May 15, to give everyone some time to say goodbye. Some systems may be shut off before then, but you will have access to email, Slack, and BlueJeans until the end of tomorrow (Friday).

In the UK, the process is different and will take longer due to local regulations. We will hold a meeting for all UK employees immediately after this one to explain the process further. Wherever you are located, we will provide more information in your individual meetings.

Severance benefits

While of course there is no replacement for a secure job, our severance packages for departing employees are intended to soften the impact of a layoff as best we can:

• Everyone whose job is being eliminated will receive severance pay at their current salaries well beyond your last day of employment, with the exact amount dependent on how many years you have worked at Quartz, the country in which you work, and other factors. We will explain the details of the severance packages in individual meetings.
• Severance will be paid as one lump sum on the soonest possible payroll date in June. But if you plan to apply for unemployment benefits and would like to receive severance at a later date or over time, we can accommodate that request.
• For US employees who participate in our health insurance plan, we’ll cover premiums—our costs and yours—for a number of months. The exact amount will also depend on length of service to Quartz and other factors. In any event, we’ll give that to you upfront in cash, for maximum flexibility in how you maintain coverage.
• We’ll do our best to assist you in finding another job. All departing employees worldwide will have access to an outplacement service that can advise you on locating job opportunities, updating your resume, and other needs. We are also activating Quartz’s talented alumni network to help, and will invite you to the Slack team for Quartz alumni.
• You can keep your laptops for six months. We aren’t going to try collecting them in the middle of a pandemic and, in the meantime, hope it can be useful for your job search. When it’s safer to collect equipment, we’ll follow up with options to return or purchase it.

Of course, there are many other details to go over. We will provide an FAQ and be prepared to answer more specific questions you may have in individual meetings for departing employees.

Saying goodbye

We have created a #goodbye channel in Slack for anyone to share farewells and contact information. I wish we could recognize everyone individually and be together for this moment, but we will do our best to give everyone their due respect over the next two days.

There is nothing normal about these circumstances. You have all done a great job this year responding to a crisis that has tested all aspects of our lives, not to mention our jobs. The work we all do has never been more vital. Quartz’s coverage of the pandemic and its economic effects has been stellar, and will continue to be. It is the kind of global crisis that Quartz was born to cover. That we are also caught up in the crisis as a corporation doesn’t change the quality or importance of the work. Even if you are leaving, you should be proud of what you have built. I am immensely grateful for it, and I’m sorry to be saying goodbye in this way.

We will make sure to take your questions, but not in this meeting, as we want to speak with affected employees first and answer their questions. For the more than 100 of us who remain at Quartz, I look forward to talking with you all in more detail about our strategy on Monday.

I never could have imagined a day like when we started this thing, nor when I took over six months ago. What makes Quartz a great company on good days is what makes a day like this so difficult, too. I’m thinking of all of you in this moment, and know that you will all be there for each other, as difficult as this is. Thank you.

Zach