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Downturn in Consumption Hits Consumer Reports; Mulling Layoffs

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If consumers aren’t buying, then they aren’t buying Consumer Reports either. At least not as much as previous years. And so, even though the print + online combine still has nine million subscribers (it doesn’t accept advertising) and has been profitable for the longest time, the parent Consumers Union is mulling some layoffs, its first ever, if the employees union doesn’t agree to a $1.8 million in cost savings. CU’s new 2010 fiscal year, which started on June 1, projects an operating loss, though the Union won’t specify how much. CU’s annual report for 2009 is not yet out, and will likely shed some more light on the non-profit’s financials. is the largest online subscription site with about 3 million subscribers.

The layoffs aren’t decided yet: the 600 employee strong company has already gone through cost-cutting measures like pulling back on travel, vendors etc, and has also cut some of its managers’ salaries and withheld bonuses. But now, it is the turn of 300 of its employees who form part of the New York Newspaper Guild and negotiations are ongoing. If the talks don’t yield any results by July 17th, CU has submitted names of 21 employees who might have to be laid off, resulting in the required savings. These layoffs, if needed, will happen in August.

The Guild’s letters back and forth with CU’s management are posted here, including one posted today about the ongoing negotiations. This letter from Bill South, a CU employee and Guild’s chair, posted back in April, outlines some of the challenges, both macro and micro, that the Union faces, including relaxing of some of its testing procedures to come up to speed with competition in the digital age.