MORE REDUCTIONS: Time Inc. hasn’t remained above the fray of magazine publishers slashing costs because of the economy. The company on Thursday trimmed about 30 positions at its Alabama-based Southern Progress titles. The layoffs affect positions across business and editorial sides of the division, which publishes shelter and lifestyle magazines including Cottage Living, Southern Living, Cooking Light and Coastal Living. The layoffs come a week after change at the top for Southern Living, when the company said Eleanor Griffin would take over for John A. Floyd Jr. as editor in chief. Floyd is retiring from the company after 18 years as editor in chief and 31 years at Southern Progress. “Of course we are sad to be losing good people,” said Time Inc. in a statement. “But the shelter market is under pressure, and it is therefore not surprising that we are having to adjust our business during these difficult times. We publish excellent titles and Web sites and are committed to making the right decisions to ensure that they withstand these difficult times.” According to Media Industry Newsletter, Cooking Light’s ad pages have fallen 21 percent through November, to 1,145; Cottage Living is off 5 percent, at 514 pages.
But Time Inc. isn’t alone. On Thursday, WWD reported Hearst was trimming positions at a number of its titles, and had already reduced sales and merchandising positions at Harper’s Bazaar. WWD has also learned that sales positions at Seventeen were cut last week, just after the closure of Cosmogirl, and insiders are buzzing Town & Country has asked some staffers to reduce their work weeks to avoid cutting jobs. Sources inside the building speculate more cuts will occur in the coming weeks across most of the Hearst titles. While the company did not comment on specific departures, a spokeswoman said, “Hearst is always looking at smart ways to do business and, like every major company in this economy, we’re examining where we can streamline. In some cases, that may mean shifting resources and adjusting staffing. At the same time, we continue to hire, as well as introduce new successful products like Food Network Magazine and Delish.com. Hearst is a privately held, diversified company with a healthy balance sheet, so we’re confident that we’ll be well positioned when the market rebounds.”
This story first appeared in the October 24, 2008 issue of WWD. Subscribe Today.
— Stephanie D. Smith
TOUGH TIMES: The New York Times Co. on Thursday reported that third-quarter net income dropped 51.4 percent to $6.5 million, while ad revenue slipped 14.4 percent to $398 million, total revenue decreased 8.9 percent to $687 million and executives said during a conference call that the board will “review our dividend policy,” which could result in taking it to zero or cutting it in half.
Following the earnings release, Moody’s Investors Service placed the publishing company’s senior unsecured and Prime-3 commercial paper ratings on review for a possible downgrade. The current ratings, Baa3, is the lowest investment grade rating before dipping into junk status. Meanwhile, Standard & Poor’s lowered its corporate credit rating to junk status, BB-, a three-notch downgrade. “The negative outlook reflects our expectation for significant ongoing rates of EBITDA decline and uncertainty regarding when ad revenue could potentially begin to moderate,” according to the S&P report.
Despite a tough quarter for advertising, a few categories continued to do well, including luxury, which was up in the single digits, financial services, health care and corporate advertising. Internet revenue for the quarter rose 6.7 percent to $85.1 million and Internet ad revenue increased 10.2 percent to $74.4 million.
— Amy Wicks