Panic: When Will the Layoffs End?
Industry’s latest bloodbath has magazine staffers on edge.
11/06/2008 -14:45 PM
The numbers are staggering: 22 at American Express Publishing; 30 at Southern Progress; 111 at Rodale; as many as 600 at Time Inc.; an unspecified number at Condé Nast, where a 5 percent across the board budget cut was implemented; and just yesterday more cuts were announced at Hearst.
It’s no longer just alarmists who are doing the panicking over the industry’s recent spate of layoffs. It’s everyone.
At a conference last week, Ann Moore, Time Inc.’s normally bullish CEO, was uncharacteristically reticent: “By October it was looking like 1931,” she said. “[Time Inc.] has never had so many advertising clients in trouble at the same time. The declines are stunning.”
As one senior staffer at a major consumer magazine told me at Radar’s Halloween party-turned-funeral in New York, “It’s like a perfect storm: hemorrhaging of print advertising, crashing stock prices and panicked CEOs.”
So the question on everyone’s minds in magazines these days is this: When will the panic—and layoffs—end?
Back in March, when FOLIO: published its annual magazine job report, Eliot Kaplan, editorial talent director at Hearst, said it’s a “great time to enter the industry,” as job descriptions broaden and employees gain marketable experience well beyond the printed page. But he admitted Hearst was “not adding a lot of bodies” and trying to achieve growth with existing staff. “We try to get fewer people touching the page without affecting the quality and making it as good as or better than ever,” Kaplan said.
Not surprisingly, virtually all of the executives at these companies and others contacted by FOLIO: this week refused to talk on the record about the layoffs or the associated panic within their organizations.
But that doesn’t mean you can’t talk.
So, let’s get this discussion started: When will the layoffs end? Add your thoughts in the comments section below. I’ll kick things off ...
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Best Case/Worst Case
Submitted by Dylan Stableford on Thu, 11/06/2008 - 14:48.In the best case scenario, some speculate, the turnaround would begin in March, after the president is inaugurated and new Congress can begin to assure Wall Street and Madison Avenue that the economic stimulus package will actually work. Or, more likely, not until late 2009 at the earliest. Check out Nat Ives’ doomsday scenario ("Will Print Survive the Next Five Years?" http://adage.com/mediaworks/article?article_id=132197) for a good primer.
Layoffs and reality in media
Submitted by Anonymous on Thu, 11/06/2008 - 15:53.Bad, hard time across the board -- its like trying to stanch a hemmorhage from an artery with a paper-clip. Advertisers across the board are getting hammered; media companies are cutting to the bone to survive (and that includes salary reductions/ givebacks, headcount cuts, etc.).
You have to survive -- while I work at a media company now, I know our industry is contracting so rapidly that I'm pretty sure I won't be in the industry in a year's time. At the ripe old age of 48, I've made up my mind and put my mental and financial resources toward re-training myself and finding another job in another industry. I don't know when "media" will turn around, but I don't think it'll be anytime in the next 12-18-24 months.
I count my blessings I'm not flat on my ass out of work like many of my colleagues; I have the gift of time so I'm using it to stay employed as long as I can until I can move on.
Working in publishing/media today is like being at a wake; you know a funeral follows it, so you push to move on-out before you see your name in the program.
best case/worst case
Submitted by Anonymous on Thu, 11/06/2008 - 16:06.It will end only when there's enough value in the printed product to make its format a must have in relation to free time.
It will continue to shrink
Submitted by Anonymous on Thu, 11/06/2008 - 16:08.It will continue to shrink and quality will continue to decline. Move to digital
Print won't die, but it also won't live the way it used to.
Submitted by Also Anonymous on Thu, 11/06/2008 - 16:46.We've known about the long-term trends affecting the print media industry for ages. This is not an industry that has great growth prospects. But does anyone truly think that we're not going to be reading in 10-20 years? Of course we will. It's just that the "print" industry may look a lot different than it does today. I think the current business model of printing stories with limited shelf-life on dead trees will disappear. But selling advertisers audiences who want branded, well-edited readable content will never go away.
The Strong will Survive
Submitted by Walter Jungbauer on Thu, 11/06/2008 - 17:10.Those of us with many years in the business have seen expansions and contractions. We've seen paper increases that don't make sense and we've seen the transition from film. When you take it all together, change is hard. Print is not dead. We need to leverage the sensory side of our product to refute the 'all digital' philosophy. Digital strategy is essential, but it means different things to consumer titles and B2B. At the end of the day, there will be fewer viable titles delivering solid (measurable) audiences to their advertisers. We'll be ok for at least the next couple generations.
Unrealistic margin expectations
Submitted by Anonymous on Thu, 11/06/2008 - 18:09.Do not forget that Esquire itself was started in the midst of the Depression. Content products that satisfy real needs will survive. However, that doesn't mean that the highly leveraged, 35 percent plus profit margin model will survive with it. Those who continue to cut in order to support the latter will drive many products out of business as quality declines and the magazines or sites do not offer the value that is necessary to make them "must read" products
Right sizing?
Submitted by Rex Hammock on Thu, 11/06/2008 - 18:28.First, isn't Southern Progress a part of Time Inc. so aren't the 30 layoffs there a part of the 600 at Time Inc.? Second, I once had the unfortunate duty of laying myself off, but I didn't confuse that with the end of the media business. When business contracts, companies have to respond with decisions that are dicatated by reality. Magazines that are not valued by their readers or advertisers will be shuttered. Unfortunately a lot of good people -- very talented and wonderful people -- will lose their jobs in the process.
Swimming in the Sewer
Submitted by Anonymous on Thu, 11/06/2008 - 22:19.The business goal is to make money. Hard to make money in this environment.
Revenues are down so cost cutting is the easiest option. Revenue is not coming back in the near future. Can't keep cutting costs. Can't keep losing money.
Mood is terrible and not getting better.
Only the strong survive- if the owners are comitted to staying in business. They'll lose money getting to the other side of this mess.
Don't take anything personal. It's just business - and it's going to get uglier.
Move on if you get an opportunity or hang in there - say some prayers and try to keep the stress level down. Quit drinking, exercise, and get sleep.
Don't over analyze swimming in the sewer.
re: Right sizing?
Submitted by Dylan Stableford on Fri, 11/07/2008 - 10:28.Good point Rex, I forgot to clarify. According to my sources, they may not have been, although Time Inc. refuses to disclose exactly how many layoffs they plan to make. So for now, we'll keep them separate.
A new business model?
Submitted by Anonymous on Fri, 11/07/2008 - 11:13.We've launched three local direct-mail niche magazines this year with circs of 20,000 each. Two are monthly and one is quarterly. Combined margins of these titles are over 40 percent. All are growing despite the economy. Articles and art are freelanced, with production, web and ad sales in-house. Our shop is a small three-person operation whose members have national magazine, B2B, trade and newspaper experience. Remember: You're the talent that makes the publisher money. That talent stays with you when you leave. Think creatively about a direct-mail startup.
Finally
Submitted by Anonymous on Fri, 11/07/2008 - 14:48.I recall sitting through a conference on the fate of newspapers and magazines back in 1992-93. The Interent was just raising its head and a few back then recognized it.
Fastforward to now, and yep, the Internet has taken big, bloody bites out of newspapers -- I was given the choice of salary cut or severance in August. I, thankfully, bailed then.
Mags are now victims of the same thing that hit papers in the first quarter of '08, plus the added heat of the market meltdown.
Face it: We were all living way too high off the real estate hog for the last five, six years -- even with the Internet breaking in to our bread-and-butter revenue streams.
Print will survive, but it will be a shadow of its former self. In the meantime, will we ever figure out how to make print money off our Web sites? And if we do, it'll likely be too little too late as the next generation of Web upstarts will be on to the next-new-thing.
Consitions in the industry
Submitted by MDWhite on Mon, 11/10/2008 - 17:32.Consitions in the industry will improve only when the media regain the trust of the public. Over the past several decades, the shift amongst journalists has been away from the fair, accurate, and sober reportage that readers/viewers expect and deserve to a desire to "change the world" and "make a difference." Deny it all you want and analyze it 'til you're blue, the truth is that many who are working as "reporters" and "editors" today should have gone into social work, not journalism. I say this as a "J" graduate with 30-plus years in the business.
It's not the quality
Submitted by Anonymous on Tue, 11/11/2008 - 07:04.Anybody who believes improved quality can hold readers is living in a Rip Van Winkle stupor. Britannica had pretty good editorial quality, right? As a business, it's a ghost of what it used to be before first CD-ROM encyclopedias and finally Wikipedia came along. The same market forces apply to newspapers and magazines. Why should anyone pay for a classified when it's FREE on Craig's List? Why should we have laws requiring legal ads, when the smallest of local governments have web sites? The list goes on and on! Why should anyone read a limited editorial page when endless, searchable blogs and posts are available free? Fundamental changes in the economy and publishing have wrecked the business model. It's tough to compete with FREE. This doesn't just apply to print on paper. Talk to the folks at Netscape who lost their jobs to Microsoft's inferior browser. Talk to the folks at Microsoft now bleeding from Google's free online software. But when you're up against hundreds of amateurs donating their unpaid efforts to the Huffington Post from a computer in their mother's basement? Then, yes, having to amortize a Goss Metroliner and satisfy stockholders can be a bit of problem. The quality of American newspaper writing hasn't changed materially in 50 years. Some of it stunk back then too, but that's not the point.
Don't Give Away Internet Products
Submitted by Anonymous on Fri, 11/14/2008 - 13:30.Publishing only survives as a money-making business if we stop giving away our online audiences to advertisers so cheaply. We need to build digital products that cost as much or more than print advertising, or this will become a drastically smaller industry. The value is there, but too many publishers are still too infatuated with print to really educate advertisers about the value of online. The fact is that the digital audience if more valuable than print's, because it's younger and more forward thinking.
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