The Texas Tribune is one of nonprofit news’ brightest stars. Here at Nieman Lab, we’ve covered the award-winning newsroom closely, from its launch in 2009 to, just last year, when it expanded into regional coverage for the first time. Since founding Revenue Lab in 2019, the Tribune has advised hundreds of other news orgs on revenue and business sustainability. “By sharing our journalism and offering training and information sharing to spark innovation,” their 2022 annual report reads, “the Tribune sends ripple effects throughout the news industry and lifts up our peers.” The same report shared that the Tribune ended the year with a record-high 10,000 members and that more than 9,000 people attended the annual Texas Tribune Festival.

It came as a shock to many, then, when the Tribune announced the first layoffs in its 14-year history late last week. In total, 11 people were let go, including long-time reporters covering criminal justice and politics and demographics, as well as the entire copy desk. Two podcasts (the daily audio Brief and a weekly show called TribCast) have been put on hold.

A good number of people in the news industry did not find the initial explanation from CEO Sonal Shah satisfactory. Frustration over a lack of transparency has been amplified by the newsroom’s status as the gold standard of nonprofit journalism and a role model other outlets have been encouraged to follow.

I read this and don’t feel any closer to understanding what just happened at the Texas Tribune. What faltered? Corporate sponsorships? Reader donations? Digital ad revenue? Nonprofit grants? Festival ticketing? https://t.co/nKr42A6HrC

— Matt Pearce 🦅🇺🇸 (@mattdpearce) August 24, 2023

Frustrating to come away from a news nonprofit CEO’s explanation for layoffs with…no real explanation for the layoffs.

There’s no reason there couldn’t have been some actual transparency — with real numbers, even — here. https://t.co/Ac1JnIUmuC

— Joshua Benton (@jbenton) August 24, 2023

The Trib was always held up as the models others should follow. They were encouraged to share the “secret sauce”. Which is makes it even more important to share how the sauce got burnt. Leaving 11 journalists jobless.

— Karen Gadbois 🐝 (@gadboislensnola) August 24, 2023

💯 the lack of transparency and the obvious BS coming from the head of a news org like this is… something. I gasped when I saw they tried to lump AI into all of this.

— Scott Brodbeck (@scottbrodbeck) August 24, 2023

I agree, Josh. @SonalRShah‘s note is disappointing for the reasons you mention. It offers no explanation of what went awry beyond “we’re not immune from…” That is not in keeping with the Tribune’s leadership position, and it prevents us from learning from these events.

— Jay Rosen (@jayrosen_nyu) August 24, 2023

It’s hard to overstate the shock this is causing in the nonprofit journalism world. The Texas Trib has been a model for years, not just for its outstanding journalism but also for its successful events/membership revenue model.

If the Trib is having trouble, others might too https://t.co/ShZgI1HvEc

— Bill Grueskin (@BGrueskin) August 24, 2023

Since those tweets, we’ve learned a bit more, albeit not from the newsroom’s executives directly. In a three-hour staff meeting, the Tribune’s leaders blamed the first-ever layoffs on a budget shortfall. The Tribune expected revenue to be up 10% this year — following other profitable years — but instead, it was down 5%. The staff was told the layoffs would save the nonprofit newsroom $1.1 million. Both Shah and editor-in-chief Sewell Chan will take 10% pay cuts, according to reporting by Poynter.

Through an external spokesperson, Shah and Chan declined to comment on critiques of the Tribune’s transparency. (The Texas Tribune has hired the New York City-based Risa Heller Communications to help with media inquiries. That’s the firm profiled earlier this year by New York magazine for its pricey crisis work under this subhead: “If you’re Jeff Zucker or Mario Batali or Jared Kushner and you’re trying to survive a bout of very bad press, she’s who you call.” In the piece, Evan Smith — the Texas Tribune’s co-founder and former CEO — asks: “Is there anybody who has stepped in shit who does not call her to clean their shoes?”)

In her original note about the layoffs, Shah said the Tribune’s business operations are “too lean to support an organization of our size.” The revenue team — currently two people — will add two more, the spokesperson confirmed. The three-person development team will add one new position. Even after laying off roughly 10% of its staff, the Tribune will still be one of the largest local newsrooms in the country.

The layoffs suggest a changing funding environment as much as budget planning mistakes or a lack of business-side personnel. As first reported by The Austin Chronicle’s Lina Fisher, public institutions have pulled sponsorships, which make up a significant portion of the newsroom’s revenue. In not unrelated news, a bill introduced earlier this year in the Texas legislature would — if passed — ban Texas colleges and universities from giving to nonprofit media. The lawmaker who filed the measure had previously called the Texas Tribune “trash” over its coverage of an elections bill that tightened mail-ballot requirements.

The Tribune declined to comment on the record, though a breakdown included in their 2022 annual report suggests sponsorships are an important revenue component. (The Tribune does not have a paywall and allows Texas newspapers, news sites, and radio and television stations to republish their work for free.)

Writing in a listserv for nonprofit newsrooms, Neil Chase, CEO of CalMatters, noted the group had “learned so much from the Tribune over the years” and that “if we’re going to learn the good we need to learn from the challenges too.” Chase confirmed other newsrooms were facing similar challenges: “Every public media organization that receives significant corporate sponsorship is hurting this year,” Chase said. “You can really see it in many of the nation’s public radio stations just as you can see it at the Tribune.”

Others have laid the blame elsewhere. Some of the journalists who were laid off have posted about what they see as “leadership failures” and “a financial and leadership tailspin.” (The Texas Tribune has many new faces in its senior management, including Shah, who took over as CEO in January. Staff were told she took recommendations from other managers, including Chan, about the cuts.) Some Tribune staff saw recent hiring decisions — including those for the regional expansion in 2022 — as too hasty.

David Pasztor — described as the Trib’s most experienced editor — was among those laid off. Pasztor told the Austin Chronicle that the Tribune’s current leaders are neglecting the “excellent in-depth reporting on politics, governance, power” that the Tribune was founded to do. His complaints echoed some public comments from readers: “It is a completely short-sighted approach to stop covering the criminal justice beat in TEXAS, of all places. Please rethink this terrible decision, @texastribune,” one wrote on Facebook. “This is incredibly, incredibly disappointing news,” another wrote. “How could you decide to let go your most tenured reporters, and reporters that cover criminal justice in this state RIGHT BEFORE special sessions, impeachment and election year?”

“Audience pursuit is trumping the journalism part,” Pasztor told the Chronicle. “The farther they go down that path…they’ll basically become another in that range of media organizations holding out their tin cup and saying, ‘Please, please, we’ll write whatever you want. Just give us money.'”

Earlier this year, former Washington Post executive editor Marty Baron, reaching for an example of a successful journalism business beyond The New York Times in an interview, brought up the Texas Tribune as the example “everyone points to.” He then offered some words of caution:

“I would mention that nonprofits are not immune from business considerations,” Baron said. “It’s not like being a nonprofit immunizes you from having to make enough money in order to pay people’s salaries and to invest in the future, to invest in the technology that’s necessary and make the other necessary investments in the future. So just being nonprofit is not like some magic wand that that solves your economic problems.”

The Texas Tribune is a first-rate newsroom that has been innovative in important and far-reaching ways. It’s inspired countless news orgs — both nonprofit and not — and has been admirably transparent about lessons learned in the past. No matter what led to these first-ever layoffs, journalism should get the opportunity to learn from them.