In the magazine world, it’s not just Condé Nast that has been forced to take action as it grapples with a coronavirus-related plunge in advertising revenues.
People and InStyle owner Meredith Corp. has cut salaries for 60 percent of its 5,000 staffers, paused its stock dividend payments and withdrawn guidance about its fiscal 2020 performance, causing its share price to close down 7.5 percent Monday to $13.02.
“The COVID-19 crisis has created an extremely challenging business environment, including significant advertising campaign cancellations and delays,” said Meredith president and chief executive officer Tom Harty in an update to investors.
“While our financial position is strong, given the impact on advertising — which represents approximately half of our revenue mix — we are proactively taking aggressive actions to strengthen our liquidity and enhance our financial flexibility in the near-term to effectively navigate the current environment,” he added.
In terms of salary reductions, WWD understands that around 45 percent of those impacted will receive a 15 percent pay reduction, while the remaining 15 percent, made up of Meredith’s highest paid employees, will take pay cuts of between 20 percent and 40 percent, effective May 4 through September 4. Employees receiving pay reductions will have one day of unpaid leave a week during the same period. Meredith will also be implementing a wage, salary and hiring freeze.
As for the dividend, which the company raised just over two months ago, Meredith will look to resume payments once advertising market conditions improve.
Like other media companies, Meredith’s advertising woes come despite a rise in engagement, with it stating that traffic to digital sites was up 40 percent in April, while for Meredith’s local news digital sites it was up 50 percent in the third quarter.
Exactly a week ago, Condé, the publisher of Vogue, Vanity Fair, GQ and Glamour, among others, told staffers 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. Ceo 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 company’s highest-paid executives — will reduce their base salaries by 20 percent.
Other media companies that have made cuts include New York Magazine owner Vox Media, Bustle Digital Media, BuzzFeed, Fortune Media and Gannett Media.
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