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The ax finally dropped at Time Inc. — the company started its layoffs on Wednesday as it aims to reduce costs by $100 million across the publishing division. Memos to employees protected under the Newspaper Guild seeking volunteers for buyout packages were sent around, and staffers will have two weeks to decide whether to accept a package.
During Time Warner Inc.’s third-quarter conference call Wednesday, chief executive officer Jeff Bewkes said Time Inc.’s news division, which includes Time, Fortune, Money and Sports Illustrated, would incur most of the cost cuts. The changes include reducing the frequency of Fortune to 18 times a year from 25 and focusing the magazine’s coverage on the largest corporations. Time Inc. also will further pool the management and editorial teams across all the news group brands.
Time Inc. on Wednesday shuttered Fortune Small Business, affecting at least one full-time staffer and another four or five employees who worked on that title as well as other projects. Fortune Small Business was moved to Time’s Custom Publishing division from the news group a year ago.
As for other changes, Time is looking for up to 12 union-protected volunteers, and Fortune, which is expected to be the hardest hit of all the titles, is hoping several designers, reporters, researchers and employees at other positions volunteer, but did not specify a number in memo to staffers. Sports Illustrated is also seeking a handful of volunteers, but dismissed about 15 to 20 sales and marketing employees on Tuesday.
People, part of Time Inc.’s style and entertainment group, is looking for eight volunteers.
At other titles not a part of the Guild, Essence let go of around a dozen employees, including at least four on the print editorial side with the rest coming from its Web site, and Entertainment Weekly cut about 11 staffers, mostly on the business side. InStyle laid off about six employees across both the editorial and business sides.
And the changes at Time Inc. won’t likely end there. Bewkes, during the conference call, said the company would also “continue to take a hard look at nonstrategic and less-profitable titles.” Though the number of total staffers to be laid off wasn’t confirmed by the company, reports put the number at between 400 and 550. This round follows Time Inc.’s paring of 600 employees last fall and some 250 staff cuts in early 2007.
During its third quarter, Time Inc. reported an 18 percent dip in revenues, to $914 million, with a 22 percent decline in advertising revenue and a 13 percent drop in subscription sales. Operating income fell 40 percent, to $97 million. Looking ahead, the company said fourth-quarter ad revenues and subscriptions are improving, with food, automotive and beauty advertising poised to show better numbers than last year.
Overall, Time Warner reported a 6 percent decline in revenue, to $7.1 billion, while operating income fell 10 percent, to $1.4 billion. Bewkes raised the outlook for the company’s earnings for the year, to $2.05 a share from $1.98 previously. The forecast includes the $100 million restructuring charge to be incurred in the fourth quarter. Bewkes also reiterated the company expects AOL to be spun off by the end of the year.