Time Inc. has already implemented numerous cost-cutting measures ahead of its spinoff from parent company Time Warner, which was officially completed yesterday when CEO Joe Ripp rang the opening bell at the New York Stock Exchange. But for the newly independent company, already saddled with $1.3 billion in debt, the road ahead won’t be getting much smoother.
Over the weekend, a report in the New York Times said that the company is planning to make even deeper cuts, which includes reducing editorial costs by about 25 percent in the coming months. Time Inc. has already finalized a move from Time & Life headquarters next year (which Ripp said would save $50 million per year) and, in late 2013, eliminated more than 500 jobs.
When asked about the Times' report, Ripp said that cost-cutting measures will continue to be par for the course across all departments. “We’ve been working with [chief content officer Norman Pearlstine] for quite some time, asking about costs for pictures, about the number of kitchens we have, about how we can share content, but we’re also asking questions of the finance and marketing organizations,” he said.
According to a source within the company, although staffers are suitably concerned about their futures in light of the recent news, there’s been no formal announcement as far as the scope of these latest cuts. “There are always discussions about cutting and the [25 percent] number has been floated out there for sure, but there’s been no word of exactly where or how. No one really knows what to make of it yet.”
Added the source, “I think it’s reached its point where change is so constant that you can’t fret about it as much.”
There has also been some speculation that Time Inc. might consider selling its lifestyle group headquarters in Birmingham, Ala. While Ripp said that there are no immediate plans to move titles like Southern Living and Cooking Light from their current home, he added, “We’re asking ourselves hard questions about all the real estate we own.”
Despite the company’s financial troubles, Ripp was bullish about acquisitions. Last week, the company bought family organizer app Cozi, which Ripp said will fit into Time Inc.’s current lifestyle offerings. “I think you’ll see a lot more acquisitions from us,” he said. “I don’t see myself doing the $2 billion transformative transaction anytime soon, but I do think there’s an opportunity for us to invest wisely to offset the print decline that we’re experiencing.”