Reader’s Digest Association Cuts 150 Jobs Worldwide
Aims focus on ‘master brands,’ including Reader’s Digest, Taste of Home.
Reader’s Digest Association has eliminated 150 positions across all of its business groups worldwide, with half the cuts affecting jobs in the U.S. and the other half international. All of the affected employees have been notified and will leave the company by year’s end, according to a Reader’s Digest spokesperson.
The cuts are aligned with an effort to focus on the company’s “master brands,” including Reader’s Digest, Taste of Home and The Family Handyman, “that have the greatest potential to grow across multiple platforms and through new revenue streams, such as partnerships and licensing in markets around the world,” a Reader’s Digest spokesperson writes in an email to FOLIO:. “In tandem, we are evaluating existing businesses which are not strategic and/or profitable, reducing our cost structure and identifying operating efficiencies.”
The spokesperson declined to specify whether additional cuts will follow but said, “Any smart company is continually looking at ways to work efficiently to effectively compete. As we continue to transform our company, we do expect that as a normal course of business, some positions will be eliminated and some new jobs will be created.”
The spokesperson also declined to provide a breakdown of the cuts by business, though last week thirty positions were reportedly eliminated at the company’s Greendale, Wisconsin-based Reiman Publications.
In November, the company announced third quarter revenues of $357 million, up 4.4 percent versus third quarter 2010. Net loss improved from a loss of $86.8 million to a loss of $76.8 million, while EBITDA fell to a loss of $16.6 million—in part due to a decline in revenue from Every Day with Rachael Ray, which the company sold to Meredith Corp. this fall. The title saw a 21 percent drop in ad pages for the first nine months of 2011. According to the spokesperson, Reader’s Digest magazines finished the year with a 16.9 percent increase in ad pages over the year before.
The company is currently led by CEO Robert Guth, who replaced Tom Williams in September, becoming the third CEO for the company within the year, as Williams took over for Mary Berner in April.