Time Warner Publishing Plans Cuts : * Magazines: The company hopes to save $30 million a year in a restructuring that includes eliminating 600 jobs.
Aiming to save more than $30 million a year, Time Warner Publishing announced a restructuring program Thursday that includes elimination of about 600 jobs, or 10% of the work force, at its magazines.
The cutbacks include the closure of Time magazine bureaus in Houston, Detroit, Boston, San Francisco and Miami, a Time Warner executive confirmed. The news magazine, he added, “will continue to maintain a staff presence” in those cities, with reporters likely working from their homes.
Time Warner’s cost slicing comes as the magazine industry in general is under pressure from the deepest slump in advertising that many magazine executives can remember.
The decline in ad volume has driven some titles out of business. Industry estimates indicate that the drops at some of Time Warner’s magazines have been steeper than the average for major consumer publications.
According to Time Warner, 105 editorial jobs will be eliminated, on top of 500 jobs in areas such as production and sales that have been cut in the past few months.
The company didn’t specify where the editorial cuts will occur, but union leaders briefed on the plans said they will come mainly at six of the firm’s New York-based magazines: Time, Sports Illustrated, People, Fortune, Money and Life.
Key Martin, chairman of the Newspaper Guild at Time Warner, said 69 of the planned cuts will come from Time and Sports Illustrated alone.
Time’s seventh New York-based magazine, Entertainment Weekly, was spared editorial cuts. It has only recently begun its second year in operation.
“The economics of the media business require that companies that wish to remain competitive must take bold but painful steps,” said Reginald K. Brack Jr., chairman, president and chief executive of Time Warner Publishing.
Employees of the magazines were particularly angry Thursday because top Time executives had promised that there would be no layoffs because of Warner Communications Inc.'s debt-financed purchase of the publishing company last year.
Time Warner recently cut its long-term debt to $8.9 billion from $11 billion after a stock rights offering that raised about $2.7 billion.
But many shareholders are still dissatisfied with the performance of the merged company’s stock. The restructuring was announced after the stock market had closed. Time Warner shares closed Thursday at $79.125, up 25 cents on the New York Stock Exchange.
Time Warner Publishing said it would take an accounting charge of $60 million before taxes against its third-quarter earnings to reflect the costs of the restructuring, employee severance payments and consolidation of certain operations. It said the division should be marginally profitable in the third quarter after accounting for the charge.