Time Inc. Parent to Initiate ‘More Targeted’ Restructuring of Publishing Group
As many as 280 layoffs expected in New York; total headcount not determined.
Time Warner CEO Jeff Bewkes said during an earnings call this morning that the company will incur a $100 million charge during the fourth quarter as it begins a restructuring of Time Inc., primarily in respect to its news group. He said the restructuring will be “more targeted” in comparison to the massive changes that were made this time last year, resulting in around 600 layoffs. In New York, this year’s round of layoffs could total 280, according to a filing with the New York State Department of Labor.
When contacted by FOLIO:, a Time Inc. spokesperson called the Department of Labor number an estimate that the company is required to provide the state. She also said that while layoffs will be associated with the restructuring, no official headcount has been determined as the company is aiming to save a specific amount of money. The number of layoffs, she said, will depend on how many people accept voluntary buyouts.
It has been rumored for weeks that more staffing cuts were coming this year at Time Inc. Layoffs reportedly began Tuesday night at Sports Illustrated where approximately 15 to 20 sales and marketing staffers were let go. Time Inc. executives were said to have asked for an “emergency” meeting with representatives from the Newspaper Guild to discuss layoffs.
Bewkes during the call also said the company will take a look at some of Time Inc.’s “less profitable” titles. The company Wednesday shut down Fortune Small Business, a controlled circ. publication it published for American Express. The spokesperson told FOLIO: "none of the traditional U.S." Time Inc. titles are closing.
Advertising revenue at Time Inc. was reported at $456 million during the third quarter, a 22 percent drop from $585 million the same period in 2008. Subscription revenue fell 13 percent to $333 million.
During the call, Time Warner CFO John Martin said he expects Time Inc. profits during the fourth quarter will still be down but will show improvement. Some categories, he said, including food, auto and beauty, are showing growth.
Time Warner reported an operating income of $3.76 billion through the first nine months, a decrease of roughly 7 percent from the same period last year. Revenues were $20.88 billion, also down about 7 percent.
Meanwhile, the company reported Time Inc. operating income of $167 million through the third quarter, down nearly 65 percent from the same period last year. Revenues fell 21 percent to $2.63 billion. Operating income during the third quarter fell dramatically—a 40 percent decrease to $97 million, on $914 million in revenues.