SXSW Lays Off One-Third of Employees Due to Financial Losses After Festival Cancellation

South by Southwest has laid off 50 employees following this year’s festival cancellation due to the COVID-19 outbreak. The festival faces losses in the tens of millions due to the abrupt cancellation.

The festival addressed the layoffs in a statement:

Due to the City of Austin’s unprecedented and unexpected cancellation of the SXSW 2020 events in March, SXSW has been rigorously reviewing our operations, and we are in the unimaginable position of reducing our workforce. Today we said goodbye to approximately one-third of our full-time staff. 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 sad to let people go this soon. We are planning for the future and this was a necessary, but heartbreaking, step.

The full-time staff was said to total around 175 employees, and the cuts were made across all departments—some of the affected employees had only been at the company for a few months, while others had worked at SXSW for over a decade. According to The Austin Chronicle, a senior official at the organization said that the layoffs were “the only way to stop the bleeding.” The employees laid off were given severance pay.

In an interview with The Wall Street Journal, SXSW co-founder and CEO Roland Swenson said: “We are planning to carry on and do another event in 2021, but how we’re going to do that I’m not entirely sure.” He also revealed that the festival’s cancellation insurance policy did not include protection for communicable disease coverage.

The entire city of Austin will face financial repercussions due to the cancellation of SXSW. Last year, the festival had an operational impact of $157 million on the city’s economy. Additionally, Austin will not authorize events with a capacity of more than 2,500 individuals unless they comply with the provisions of the new disaster declaration.