Time Inc. Restructuring to Cost $100M
Time Warner profits down 6 percent.
In an update to its 2008 financial outlook, Time Warner today said the recent reorganization and layoffs at Time Inc. will cost the company between $100 million and $125 million in restructuring charges.
In total, Time Warner said it expects to take on between $280 million and $310 million in restructuring fees this year. Through the first nine months, the company incurred about $182 million in restructuring charges, a large portion coming from an operational reorganization of its New Line Cinema business.
In its third quarter financial statement—which was also released today—Time Warner reported $2.3 billion in operating income, flat compared to the same period in 2007. Year-to-date, the company reported $6.2 billion in operating income (down about 6 percent) based on $34.6 billion in revenue (up about 2 percent).
Through the first nine months, Time Inc. generated an operating income of $162 million, down roughly 36 percent from $251 million during the same period in 2007. In the third quarter, Time Inc.’s revenue declined 7 percent to $1.1 billion, with ad revenue down 8 percent.
Last week, Time Inc. CEO Ann Moore [pictured] announced a dramatic restructuring that will reorganize it into three business units: news, style and entertainment, and lifestyle. As many as 700 layoffs are reported to be associated with the reorganization.
“By this October it was looking like 1931,” Moore said during her keynote at the ABC Circulation Conference last week. “[Time Inc.] has never had so many advertising clients in trouble at the same time. The declines are stunning.”
Moore added that she didn’t care if it technically isn’t a recession. “It is one for us.”