South by Southwest, known as SXSW, laid off roughly one-third of its full-time workforce Monday, as first reported by Wall Street Journal and confirmed by a spokesperson to Business Insider.
What We Know:
- The spokesperson did not give a specific number but, the Wall Street Journal previously reported that the company had 175 full-time employees who worked on SXSW year-round. That means that around 58 jobs were likely affected by this move.
- The two-week long tech and culture festival held annually in Austin, Texas was forced on Friday to cancel this year’s event for the first time in its 34-year history after city officials banned large events amid the outbreak of the coronavirus.
- Before the events cancellation, more than 35,000 people signed a petition urging the organizers to call off the event because of the coronavirus, and numerous major companies had pulled out – including Facebook, Twitter, Intel, and TikTok.
“Those of us in the business of live events know the level of trust required to execute an event of SXSW’s scale, and we are deeply saddened to let people go this soon. We are planning for the future and this was a necessary but heartbreaking step.”
- SXSW CEO and co-founder Roland Swenson said the organization’s insurance policy didn’t cover disease-related cancellations, according to the Wall Street Journal, putting the organization in a financial bind and ultimately leading to the layoffs announced Monday.
- Cancelling the festival will likely be a major blow to Austin’s local economy, as SXSW estimates it brings about $350 million to the city each year.
SXSW is far from the only major event that has been derailed due to the spread of COVID-19 disease, with companies pulling the plug on at least a dozen conferences, resulting in an estimated total economic hit of $1 billion.
NEW: After talking to @wsj yesterday about their precarious financial situation in light of the coronavirus cancellation, #SXSW confirms they today let 1/3 of their full-time employees go (approximately 58 people).
Sad news for Austin's prized festival. https://t.co/wfdcT38WxY pic.twitter.com/oPIfrVnpfU
— Elizabeth Findell (@efindell) March 9, 2020