Time Inc. is facing its new reality after it was unable to find a bidder willing to pay its sale price — and that reality has come in the form of massive cost cuts.
Time Inc. president and chief executive officer Rich Battista said the company cut 300 jobs globally — some of those would be layoffs, while others would take the form of buyouts.
He told WWD on Tuesday that there wouldn’t be anymore “people”-focused cuts, meaning that there may be other sorts of cost trimming outside of jobs. Battista declined to say how much the company saved on this round of cuts, but noted that it would reinvest in areas of growth, including native advertising, video, brand licensing, merchandising and new paid products and services.
Time Inc. said it hired a consultant to help evaluate the next round of cuts, and that the company, while no longer considering a sale, would consider selling titles or partnering on them with other interested parties, for instance.
“We’re seeing some real demonstrable progress,” said Battista, who pointed to his memo, which he sent to staff Tuesday.
In that note, the ceo explained the decision to cut jobs, noting: “In our recent town hall meeting, I said one of the key components of our go-forward strategy is reengineering our cost structure to become more efficient and to reinvest resources in our growth areas as we position the company for long-term success. Today we took a difficult but necessary step in that plan as approximately 300 of our colleagues throughout Time Inc.’s global operation will be leaving the company. Some have been informed that their positions will be eliminated, while others have volunteered to accept buyout offers.”
He continued: “As I’ve mentioned many times, Time Inc. is a company in rapid transformation in an industry undergoing dynamic change. Transformations do take time and patience, but I am encouraged by the demonstrable progress we are making as we implement our strategy in key growth areas, such as video, native advertising and brand extensions, and as we see positive signs of stabilizing our print business, which remains an important part of our company.”
Earlier this year, Time Inc. rejected a takeover bid from Edgar Bronfman Jr. and Ynon Kreiz that valued the company in the $18 to $20 a share range, or around $1.8 billion. Since then, Time Inc.’s stock price had slumped to under $14 in recent weeks. Time Inc. said it would update Wall Street on its outlook at the next earnings call, which will take place in August.