Penton Media Lays Off 120 Employees
The first round of what is euphemistically referred to in the industry as “merger benefits”, otherwise known as layoffs, occurred this week at the new Penton Media, with about 120 people losing their jobs in a consolidation of back-office functions, several sources both inside and outside the company said.
The new Penton was formed through the $530 million acquisition of Penton by Wasserstein & Co., and the subsequent combining of Penton with Prism Business Media. The deal closed about a month ago. In the restructuring, circulation, IT and production functions will be consolidated in Overland Park, Kansas. Accounting will remain in Cleveland, the former headquarters of Penton Media. The layoffs represent about 7 percent of the workforce.
Those employees losing their jobs “will be leaving the company in phases, with some leaving at the end of this month and others staying through the end of June,” CEO John French said in a memo to the staff. “In almost any scenario in which two large organizations are joined together, consolidation efforts must be undertaken. These were difficult decisions. The vast majority of the employees who will be leaving us have done a great job, under difficult circumstances. We have made every effort to treat them with the courtesy and respect that they deserve, and I hope you will join me in supporting them in this difficult time.”
The combined company, with a workforce approaching 1,700 people, is expected to attempt to reduce costs by about $12 million;about half through the elimination of redundant back-office jobs and about half through the renegotiation of vendor contracts.
The single biggest cost reduction on the personnel side is the elimination of a CEO position;in this case, David Nussbaum, who was CEO of Penton but left after the deal closed. Prism CEO French will run the combined company, now renamed Penton Media. According to public documents, Nussbaum’s compensation (including benefits and T&E estimates) was more than $800,000, meaning that single position produced nearly one-twelfth of the targeted savings.