Wave of Redundancies as Digital Advertising Market Declines
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In the past few months, the news has been littered with stories about mass redundancies, with the most recent cases involving the Independent and Twitter. With many businesses restructuring and making redundancies to ride the current wave of economic recession, it’s not unexpected for employees to feel a level of uneasiness, especially if they work in the digital advertising market, where there’s been a lot of digital marketing redundancies. Understanding your rights when it comes to redundancy can help you make the best of the situation, leaving you with a good package.
Shrinking Budgets for the Digital Advertising Market
Meta, Twitter, Snap, Google, Apple, Spotify, and Microsoft have all reported shrinking budgets for their digital advertising departments. This comes at a time of economic downturn and industry uncertainty.
Google’s core advertising business grew by just 11.6% year-over-year in comparison to the nearly 69% increase it had during the same period last year. Additionally, Meta, Facebook, and Instagram’s parent company had its first ever year-over-year quarterly revenue decline which was heavily impacted by the cuts in advertising as advertising accounts for a large proportion of Meta’s revenue.
What is Causing Redundancies in the Digital Advertising Market?
A combination of factors has left employers seemingly no choice but to cut back funding for their digital advertising departments.
Firstly, the war between Russia and Ukraine has caused uncertainty among advertisers. Many tech-based companies have responded to the attack by cutting off the opportunity for Russia-based companies to advertise on their platforms.
Secondly, a surge of inflation and a market downturn with fear of recession has led to companies reducing their ad budgets.
Finally, a downturn in digital advertising has come because of Apple’s app tracking changes. Apple has recently introduced new features which let users opt out of some tracking by apps, meaning some crucial data is no longer available. This data is what social media platforms use to target ads. As a result, digital advertising markets are having to pull back on funding.
How Can Employees Prepare for Redundancies During the UK Recession?
Knowing your rights when it comes to redundancy can help you assure your redundancy was both fair and can set you up with the knowledge to get a good settlement package.
An employer has an obligation to abide by several strict rules when it comes to deciding which employees to make redundant. This involves some of the following rules:
- Holding consultations before making employees redundant
- Assessing different reasons for redundancy
- Assuring the selection criteria are not discriminatory
- Assuring employees have fair notice
- Paying employees entitled redundancy pay-outs (Calculate your redundancy payment)
Read further about your employer’s obligations when making redundancies.
Your Rights During Mass Redundancies
Mass redundancies have been prevalent in news with companies such as Twitter slashing an estimated half of the company workforce. The firings have prompted legal action in the US. UK union leaders have compared the firing to the firing of 800 P&O ferry workers that took place earlier this year.
When it comes to mass redundancies on top of the already laid out redundancy criteria your employer must follow there are some additional rules. If your employer is making more than 20 employees redundant in one establishment within a 90-day period, the employer must carry out a collective consultation. If an employer is making 29 or more employees redundant, there must be a 30-day minimum consultation before any dismissal takes place. In cases where there are 100 or more redundancies, there must be 45 days minimum consultation before dismissal. Failure to adhere to these rules can leave employers prone to redundancy claims.
Digital Advertising Market Redundancies in the Independent
The Independent has put more than 1/5th of its staff at risk of redundancy. This is as the ad market and wider worsening economic conditions are forcing online-only publishers to seek to cut costs.
The Independent has put 52 roles at risk of redundancy in the UK. 30 of these roles are in the editorial positions out of 240 employees.
The need to cut costs is what is driving the decline in the digital advertising market. The Independent is one of many establishments having to make budget cuts. Facebook and Instagram’s owner Meta are rolling out a wave of redundancies. In addition, Google-owned YouTube has recorded its very first decline in revenues.
The Independent has recorded its 5th year of consecutive profitability in 2021, however, they state that despite investment and growth in some areas which include online TV service, e-commerce, and expansion in the US, it now, like many companies, needs to cut costs in order to survive.
“We are in the midst of an extremely challenging economic climate, with financial headwinds affecting the entire industry,” said Zach Leonard and Christian Broughton, the chief executive and managing director of the Independent respectively, in an email to staff.
“Considering these adverse conditions, the board has had to review the resources of our business, and in doing so, it is proposed that, subject to consultation, operating costs will be reduced, and certain roles in the business will be closed.”
Staffing Cuts in the Face of Growth
The cuts to the Independent come despite doubling profits last year from £2.7m to £5.48m. The company said that if appropriate new roles cannot be found redundancies will be made, with a consultation due to begin to “explore ways of avoiding or reducing the number of redundancies”.
After shutting their print editors in 2016 while increasing their US presence, offering digital-only journalism, the company reported a 36% increase in revenue year-on-year from £30m to £41m in 2021.
However, the worsening economic condition has led the publisher to look to cut its £24m annual cost base in 2021, up from £19m in 2020.
“It is by taking hard decisions to confront challenges and embrace change that we can keep our business strong, continue to make opportunities available, and fund more innovative, independent, award-winning journalism for many years to come,” said Leonard and Broughton.
Evening Standard Redundancies in the Digital Advertising Market
In July, the Evening Standard, reported a loss of £14m for last year. Due to forcing cuts in advertising income because of the Covid pandemic, London freesheet’s losses have risen to almost £70m in the past five years.
How a Redundancy Solicitor Can Help You Claim Compensation for Unfair Redundancy
Being made redundant by an employer who has managed the process poorly and unfairly could mean that you have a valid claim for unfair dismissal on your hands.
Our redundancy solicitors will sit down with you and discuss the facts of your case to establish your chances of success. We will help estimate any compensation entitlements. Our solicitors will help you start the process as soon as you are ready.
Redundancy can often run smoothly. However, if your employer made you redundant for the wrong reasons or handled your redundancy in an inappropriate way, we can help you.
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