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(Correction: We’ve removed an incorrect reference in this post to the sale of Time’s headquarters.) Most of the attention that gets paid to the rapid decline of the traditional media industry seems to focus on the death of newspapers, but the magazine industry isn’t the picture of health either: on Wednesday, Time Inc. CEO Laura Lang announced in an email that the media giant is cutting about 500 jobs — or close to 6 percent of its global workforce — as the company’s circulation and advertising revenue numbers continue to fall. Do these cuts mark the end or just the beginning for Time?
Rumors of widespread staff reductions at the publishing conglomerate have been floating around in media circles for several days, with some estimates of the cuts running as high as 700 people. According to a number of reports, the layoffs will hit virtually every aspect of the company, including most of its 21 magazine titles such as People, Fortune and Sports Illustrated.
At the eponymous magazine that started the empire, Time editor Rick Stengel said he was looking for half a dozen staffers to take a voluntary buyout, and if that number isn’t reached by Feb. 13, there will be mandatory layoffs. People magazine, one of the company’s top titles in terms of subscribers, said that it was looking for nine people to take voluntary buyouts — three writers and six reporters or researchers — or there will be layoffs.
Lang says Time needs to be more nimble
The bleeding is apparently so bad at the media giant that there was even a report from Reuters that Time may sell its iconic headquarters in New York City. Lang said in her memo that the cuts were required in order to transform Time into a more nimble, multi-platform company:
“With the significant and ongoing changes in our industry, we must continue to transform our company into one that is leaner, more nimble and more innately multi-platform. These reductions are part of this important transformation process.”
The broader story at Time is the same as it is at newspapers like the New York Times and Washington Post: print advertising revenue, which has been the company’s bread-and-butter for decades, is in free fall — and digital advertising and online revenue have not even come close to making up the difference. In the nine months ended in September, revenues at Time fell by 6 percent, and operating profit dropped a whopping 38 percent.
Since Lang arrived as CEO a year ago, the former ad agency executive has made a number of moves to try and boost Time’s digital revenues, including a deal with Apple to sell subscriptions through the company’s iOS Newsstand app. But the benefits of such arrangements — whatever they may be — don’t seem to be enough to stem the ongoing damage.
When his main competitor Newsweek announced that it was shutting down its print edition after a merger with Tina Brown’s Daily Beast online venture, Stengel said that Time magazine had “done very well and we’ll continue to do well.” But given what we’ve seen at other media entities, these cuts are unlikely to be the end of the pain for Time Inc.
Image courtesy of Shutterstock / Aperture 51