Daily Variety Magazine
Daily Variety magazine, which was just sold to Penske Media Group. Variety

It hasn’t been a boffo couple of months for Variety.

Five weeks after it was purchased at a bargain price by a rival media company, the veritable entertainment trade magazine is already feeling the pinch of consolidation. Its new owner, Penske Media Group, laid off 20 to 25 of its employees on Thursday, according to an internal memo posted on Deadline.com, which Penske also owns.

The cuts are part of broader plans by Penske’s CEO, Jay Penske, who cited in the memo a “substantial further investment in editorial and digital,” according to Deadline.

“Without a doubt, this is a challenging day, and I particularly wanted to notify and acknowledge those of you who will be saying goodbye to valued colleagues and friends,” Penske wrote. “As we look ahead, Variety’s business holds almost limitless potential and I will remain available to answer any questions you might have regarding today’s changes and our future.”

The layoffs involve roughly 20 percent of Variety’s entire staff. According to the memo, the cuts involve staffers from the “LA411” and “NY411” production directories, as well as its administration and conference departments. Editorial and digital employees won’t be affected. Production directories have been hit particularly hard by the decline of print media, with many having gone exclusively digital.

Penske Media did not respond to a request for comment.

In addition to Deadline, Penske owns several Hollywood and celebrity websites, including Bonnie Fuller’s Hollywood Life. The company purchased Variety last month for $25 million, about half of what its previous owner, Reed Elsevier (NYSE: RUK), had hoped to get for it. Within a week of the purchase, news leaked that the Variety.com website would lift its much-derided paywall, a move that will allow it to compete more directly with its longtime rival, the Hollywood Reporter, whose website has a traffic-oriented model. The decision was reportedly lauded by Variety’s writers and editors, who had long felt stifled by a subscription-based website that attracted a limited audience.

Like most trade magazines, Variety has struggled to retain its relevance at a time when the exclusive industry insider information it once provided is easily accessible for free across the Internet. One of its fiercest online competitors had been Deadline.com, lead by the ultra-aggressive showbiz journalist Nikki Finke. Last month, the Los Angeles Times reported that Finke “will not be involved at all” in Variety.

Deadline.com referred to Thursday’s layoffs as Variety’s “first staff reductions,” but it did not say whether there would be more.

Read Penske’s full memo here.