As expected, CEO Laura Lang announced widespread layoffs at Time Inc. today. If there's a silver lining, it's that the number—about 480, or 6 percent of the global headcount of 8,000—was a little less than some press reports put it. In a memo, Lang said the cuts come from across the company in the U.S. and overseas. Less than half the number are based in New York.
Employees have been on pins and needles for months about the expected layoffs, and today's news brought a mix of sadness and relief. "We've been sitting here for months with all the speculation," one staffer said.
Lang, who came from digital ad agency Digitas, was pithy in her remarks to employees announcing the layoffs, expressing appreciation to the people being laid off and putting the cuts in the context of the print-centric company’s need to transform itself to become multiplatform. Here's the text of her note:
Today we are beginning the painful process of reducing our global staff of 8,000 by approximately six percent. I first want to thank the people who will be leaving us for their years of hard work and dedication to the company. They are so much more than Time Inc. employees. They are good friends and trusted colleagues with whom we have worked closely. Losing them is going to be very difficult for everyone. They come from all areas of Time Inc. across our locations - both domestic and international. I am grateful for their service and I know you join me in wishing each of them all the best.
With the significant and ongoing changes in our industry, we must continue to transform our company into one that is leaner, more nimble and more innately multi-platform. To make this change, we need to operate as smartly and efficiently as possible to create room for critical investments and new initiatives. These reductions are part of this important transformation process.
I know the coming days and weeks will be hard and I want to thank you in advance for your patience as we work through this period.
The reduction at the Time Warner publishing unit will follow cuts at other media companies and come a week before the parent's fourth-quarter earnings release, set for Feb. 6. The New York Times just undertook a buyout to eliminate 30 people from the newsroom; Thomson Reuters laid off 3,000 of 50,000 people across the company; and Meredith Corp. cut 60, or about 2 percent of its workforce, to name a few.
The Newspaper Guild has labor agreements that cover people at People, Sports Illustrated, Fortune and Money. Guild-covered employees are usually notified of pending layoffs and given the opportunity to take buyouts. As of late Tuesday, the guild hadn’t been notified of any plans for layoffs, according to a rep there.
Time Inc. made deep staff cuts in 2008 and 2009. But in the third quarter of 2012, publishing revenues declined 6 percent, in part reflecting a 6 percent decrease in subscription revenues and 5 percent decrease in advertising revenues. This round of cuts is expected to be felt across the board although it would seem that Sports Illustrated would be less impacted because it took steps to reduce staff over the summer.
“Magazines are an industry in secular decline,” said Pivotal Research analyst Brian Wieser. “If you are Time Inc., you really don’t have much of a leg to stand on.”