For Hearst’s UK portfolio of consumer titles, this is the worst period of trading in two decades. That’s the approximation of CEO Duncan Edwards who had grim job of announcing almost 100 redundancies — about 15 percent of its workforce this morning. Edwards, also president and CEO of Hearst Magazines International, explains the cuts by saying it’s the worst trading environment he’s seen since he joined the company in the late 1980s and the causes are “largely outside of our control”.
Where does this leave the company’s digital plans? NatMags declined to answer questions this morning on whether Hearst Digital would be affected by the cuts, but the division has already been busy restructuring its technology teams and making redundancies in its sales team to cut down on costs. Long before the recession, the brakes were put on plans to develop each NatMags brand’s own portal — last February four mags’ sites were folded into Allaboutyou.com. As with newspapers, stringent budget cuts mean that many magazines are hamstrung when it comes to fully developing their digital strategy and, more importantly, growing digital revenues.
The company said recently it was pleased with the performance of its 19 consumer magazines, including Cosmopolitan and Esquire, despite a 6.8 percent group-wide circulation drop between July and December last year, according to ABC. Just seven mags posted a positive increase, with celebrity weekly Real People taking a 19.4 percent fall.
The situation is if anything more pressing for B2B magazines: already this year we have seen Centaur lay off 15 percent of its staff thanks to falling revenue, Incisive Media admit breaching its banking covenants, Emap Inform impose a company-wide pay freeze and change the format of its mags to A4 (via PG) to save money. What both consumer and B2B magazines have is workforces to cut — though with the redundancy programmes and budget cuts already in place that will soon cease to be the case: the cuts will have to come from somewhere else, namely shutting unprofitable titles and retreating from difficult markets.