Condé Nast is the latest publisher to turn to cuts due to the coronavirus.
To counter the plunge in advertising that is plaguing the industry, the publisher of Vogue, Vanity Fair, GQ and Glamour told staffers Monday that it is cutting salaries of those making more than $100,000 by between 10 percent and 20 percent, effective May 1. The reductions will be in place for five months across all markets.
Chief executive officer Roger Lynch will take a 50 percent reduction in his base salary, as will the external members of its board. The rest of the executive leadership team — which includes Vogue editor in chief and Condé Nast artistic director Anna Wintour, who is one of the publishing companies highest-paid executives — will reduce their base salaries by 20 percent.
“While we aren’t as solely dependent on print and digital display advertising as some of our competitors, globally, we will still see a substantial impact from this crisis on our business,” Lynch said in a staff memo. “It’s very likely our advertising clients, consumers and, therefore, our company will be operating under significant financial pressure for some time. As a result, we’ll need to go beyond the initial cost-saving measures we put in place to protect our business for the long term.”
The media company will also implement reduced working hours and work week schedules such as three- to four-day work weeks for certain roles, “in particular where government programs and stimulus packages can help supplement employees’ earnings.”
“These decisions will be made locally in markets in accordance with available government programs. Along with the salary reductions noted above, these are actions that will help us preserve jobs and benefits,” Lynch continued.
In the U.K., where Condé has a sizable office, the government is paying 80 percent of furloughed workers’ salaries. Condé also has significant operations in other European countries, including France and Italy, where governments are helping to supplement the wages of workers laid off by their employers in all sectors.
As for job losses, Lynch admitted that he expects there will be some, but did not give any details of where and when these may occur. “We’ve already closed several hundred open positions and limited hiring only to the most critical roles,” he said. “Role eliminations are never something we take lightly, and we’ll continue to work to limit this as much as possible.”
Elsewhere, it will also defer several projects, including a global employee intranet and outfitting of event spaces. A source said the company also may temporarily adjust publishing schedules of print issues by potentially shifting some summer issues into either fall or holiday.
The impact of a fall in advertising revenue as brands slash their marketing budgets due to COVID-19 was not seen in the May issues of Condé’s magazines as they have a lead time of around two to three months. Instead, experts expect signs to start to appear in June and by September, the most crucial issue for magazine publishers, the decline will be clearly visible.
Some industry analysts are forecasting that some publishers will suffer a 50 percent drop in advertising revenues and are predicting that the slump will be worse than during the 2008 financial crisis.
Condé follows Bustle Digital Group, Vice Media, Group Nine, Gannett and Maven Media, who have all had to make cuts. Vox Media, which owns New York Magazine and The Cut, is currently reviewing the impact of COVID-19 on its business and is expected to update employees this week.
To date, Hearst Magazines and Meredith Corp. have not made any COVID-19-related cuts.
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