Plus: Amazon and The New York Times partner on AI licensing deal; businesses respond to tariff ruling.
Business Insider CEO Barbara Peng sent a memo to employees on Thursday announcing significant layoffs that would affect about 21% of its staff.
This is the third round of layoffs for the Axel-Springer owned media outlet in three years, according to Variety.
The memo mentioned several reasons justifying the move, including a major pivot toward AI.
Peng wrote:
“The media industry is at a crossroads. Business models are under pressure, distribution is unstable, and competition for attention is fiercer than ever. At the same time, there’s a huge opportunity for companies who harness AI first. Our strategy is strong, but we don’t have the luxury of time.”
She added that BI is “scaling back on categories that once performed well on other platforms but no longer drive meaningful readership or aren’t areas where we can lead.”
The media outlet’s union, affiliated with the NewsGuild of New York, called the announcement “tone deaf.”
“Let’s be clear,” the statement said. “This is far from anything new. This is the third round of layoffs in as many years and it is unacceptable that union members and other talented coworkers are again paying the price for the strategic failures of Business Insider’s leadership.”
Why it matters: More companies are embracing AI daily. There’s definitely a space for it, but AI should enhance a journalist’s job, not replace it. This could cause a trust issue among its readers and make it more difficult for PR pros to pitch story ideas.
AI overviews and GEO are absolutely changing search and it’s not a bad idea to form new strategies to parallel the new tech. Both BuzzFeed and the Washington Post have created teams to explore how AI can be used in the newsroom. But as a media company, going “all in on AI” is a fine line to walk.
Peng added: “In the past year, we’ve launched multiple AI-driven products to better serve our audience — from gen-AI onsite search to our AI-powered paywall — with new products set to launch in the coming months.”
It’s not only a job displacement issue, there are major ethical concerns that newsrooms in particular need to weigh. AI is not always accurate, so this goes back to trust. And then there’s a concern over pitching. If AI can help produce content, then how do you pitch to the news outlet? Who do you reach out to? With fewer sources to contact, getting the right journalist for the right story becomes that much more difficult.
Editor’s Top Reads:
- In a similar, but more pointed effort, Amazon and The New York Times have reached an AI licensing deal that will allow Amazon customers access to specific NYT editorial content. According to Deadline, “the idea is to “bring additional value to Amazon customers and bring Times journalism to wider audiences.” The article added: “Under the new deal, Amazon is licensing editorial content from The New York Times, NYT Cooking, and The Athletic ’for AI-related uses.’ This will include real-time display of summaries and short excerpts of Times content within Amazon products and services, such as Alexa, and training Amazon’s proprietary foundation models.” This is an example of how AI can enhance journalism, draw more readers and target a specific audience. The content is not being affected by AI and it’s a smart way to reach an audience who may or may not be aware of NYT stories. It’s a creative avenue to reach more potential subscribers and offer content in a new stream.
- Trump’s trade war is giving businesses whiplash with the latest court decision to stay the ruling on tariffs. Earlier this week, a judge ruled that Trump’s 30% tariffs on China and 25% tariffs on Mexico and Canada were illegal, according to the Times. However, that decision was stayed shortly after. From the article: “The constant on-and-off-again nature of the tariffs has made business planning incredibly difficult,’ said Blake Harden, (the Retail Industry Leaders Association’s) vice president for international trade.” Another business owner questioned whether the executive branch even listens to the courts. While Trump is playing hardball, businesses don’t know how to plan. They don’t know what’s coming or if they need to be hiking prices to account for these tariffs. The messaging is as messy as the court decision itself and it could leave companies scrambling to comply at the last minute.
- An American microbrewery has done something pretty genius, yet very simple. By sponsoring a British soccer team (I mean football) they’ve found a way to integrate their brand into the hearts – and pockets – of fans. Bryan and Shannon Miles founded No Fo Brewing Co. and because of their love for British soccer, decided to sponsor the Walsall Football Team, a smaller club that plays in England’s League 2, according to the Times. Because of the team’s size, the Miles’ could afford a better sponsorship and promote their beer. Last week during the PR Daily Conference, professor and author Jonah Berger discussed this strategy for messaging: People want stories, something relatable, not just a product placed in front of them. The Miles’ weaved their brand into their love of soccer, and in turn, British fans are drinking it up. People like the guys and gals that invest in their organization. They’ll support it. The Miles’ will profit from it. They wrapped their brand in a nicely tied bow beneath their investment in the soccer club. This endears fans to the brand and allows No Fo Brewing Co. to sit neatly inside. Said Bryan Miles: “And so it just seemed to me that if we could embed the No Fo brand in that, it would be kind of like a Trojan horse.”
Courtney Blackann is a communications reporter. Connect with her on LinkedIn or email her at courtneyb@ragan.com.
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