Two weeks ago, Nick Denton hosted a party on the top of his newish Gawker offices, where he told us he was "disaster planning." Here's what that looks like: He's laying off 19 people at his network of 12 sites, but is doubling down at some of his stronger titles, where he will bring on 10 people. He will also suspend his controversial page view bonus plan for his remaining writers at the beginning of next year.

Among those cut: Three of Valleywag's 5 staffers. Among those hired: Longtime media reporter Gabriel Snyder, who wil replace Denton as Gawker.com's managing editor. In typical Denton style, he is fielding questions from commenters (and generating more page views) at his flagship site. On the bright side, he did buy many of his staffers food and booze last month.

Here's the memo:

I have some bad news. Here's the heart of it: we are cutting 19 of our

133 editorial positions and suspending bonus payments at the start of

next year. With the savings, we are increasing base pay and hiring 10

new people on the most commercially successful Gawker sites. But I

know that's scant consolation for the colleagues we're losing and for

those of you who have been enjoying the bonus windfalls from breakout

stories.



You can guess the reason for these brutal measures: the recession.

Sure, the company is currently profitable and advertising sales are up

by about 30% on their level of a year ago. Our biggest clients are

consumer electronics and entertainment companies that are relatively

well insulated. And, yes, this is not the first time I've predicted

doom: in July 2006, when we "battened down the hatches" and closed

down Sploid and Screenhead; and in April this year, when we spun off

Idolator, Gridskipper and Wonkette.



But now the credit crisis is clearly going to affect every sector of

the economy. Advertising buys typically plunge after the Christmas

shopping season, and 2009 is obviously going to be exceptionally

difficult. We have to prepare for the worst, now, rather than when the

worst comes upon us.



We never used to talk about the business side of the operation.

Traffic was the only concern; my belief was that juicy news would draw

the readers and the advertising would take care of itself. We were

patient; even if it took four years for a site to develop the audience

that finally registered with advertisers, we had the time. No longer.



Sites such as Consumerist, whose success has been measured more in

traffic and recognition than in revenue, now need to cover their

costs. I can't underline enough that this harsh commercial judgment is

no reflection whatsoever on the editorial teams that are being cut.



Each of these sites performs a vital function. Consumerist provides an

outlet for disgruntled consumers that exists nowhere else on the web;

Valleywag has given puffed-up Silicon Valley the prick it's long

needed; and Fleshbot manages to be classy and filthy at the same time.

The site leads and writers on all of our sites have done exactly what

we asked them to: work harder than the competition and grow the

audience. It's my commercial judgment that's been at fault.



One reason we're eliminating these positions is to reinforce the teams

on the sites with the most commercial appeal—Gizmodo, Kotaku,

Lifehacker and Gawker—and the properties such as Jezebel, io9,

Deadspin and Jalopnik which are poised to join them.



One new recruit we're confirming today is Gabriel Snyder from W

Magazine in Los Angeles who, as managing editor of Gawker.com, will

continue the site's evolution into a national news and entertainment

site. We are also hiring new contributors at Jezebel, Deadspin, Kotaku

and io9.



Even in the growing editorial teams we need to control costs. And that

means a new look at traffic bonuses. We've been spending $50,000 a

month on average on pageview bonuses. The scheme has made writers

hustle for traffic even in teams so large that there was a risk they

become lumbering. It's helped us hit a record 274m pageviews last

month, up 69% on last September.



Pageview bonuses will continue this quarter. And we are committed to

pageview incentives, and to measuring performance by a writer's

individual pageviews, in the long term. But a first quarter spike in

traffic -- and the resulting bonus payments -- could be dangerous if

advertising markets are troubled next year. And we're assuming that

the economy is so volatile that most of you would like a little bit

more predictability about your own income.



That's why we're suspending the pageview bonus for the first quarter

at least, but making up for some of the loss of income by raising pay.

If you haven't recently agreed to a new rate, your monthly base amount

will automatically be increased by 5% in January.



The news about the job and bonus cuts will be demoralizing. The golden

age of the blog is over, people will say. Gawker Media is behaving

like those big media companies that we mock so easily. I could come up

with some bullshit line about how much worse it would have been to

wait until we were forced to control costs; or how much more

unpleasant life will be at the many internet ventures and newspapers

that won't make it through the downturn. I could give you my

optimistic spin about the glorious future that awaits us on the far

side of this downturn.



But there is no escaping the fact that we're losing some excellent

colleagues and the environment next year will be bleak. The one

consolation is that there will be plenty of news for us to break —

starting with this email, which you are free to leak.

See Also: Gawker Boss Nick Denton Fires Gawker Editor Nick Denton, Shuffling Blog Staff Again