The layoffs at Time Inc (NYSE:TIME) continue to mount as hundreds have been shed from the company since the beginning of the year. The media company finds itself grappling with a new economic landscape, where Time’s print advertising revenue has dropped off precipitously since the transition of readers from traditional print media sources to looking online for their news and magazines. Time Inc’s layoffs in 2017 have hit across the board for the company, impacting employees in many sections, from the editorial department to the advertising department and all manner of areas in between.
Time Inc’s job cuts are another example of print media layoffs, where companies that are struggling to adjust to the new contemporary economic realities are looking to become leaner in order to account for declining advertisement revenue.
Digital media growth has fueled many of the cuts seen across the industry, as companies who were formerly used to high advertisement revenue in print are instead battling hundreds of competing outlets for cheaper online ads, bringing sinking portions of the news and magazine business.
Time buyouts have been offered in many of the mass job cuts. The company most recently announced that it would be bought out by Meredith Corporation (NYSE:MDP), with some news outlets reporting that the purchase will lead to more Time Inc layoffs before 2017 is over. After the $2.8-billion deal, Meredith is rumored to be looking to break up the company and spin off its more lucrative local stations from the company’s larger national magazines. Before the acquisition, TIME stock had been struggling, losing over 30% of its value over the year.
Speaking of those magazines, rumors also persist that following the buy, Meredith will be looking to cut some of Time’s most famous magazines from the parent company, with Time Magazine and Sports Illustrated, two of the company’s flagship publications, potentially being sold off.
Another issue to consider following the acquisition beyond the current layoffs is that Charles and David Koch were involved with a $650.0 million backing of the deal by way of preferred equity. The Koch brothers are billionaires renowned for their political involvement, usually investing heavily in conservative and Republican candidates. Some fear that their stake in the deal will compromise the integrity of some of Time’s more political publications.
Meredith CEO Steve Lacy disputed these claims in a Monday conference call with analysts, stating that, “their desire to be passive and not require a board seat and observer rights and all sorts of other things that we learned as we went through the process, without a doubt, made the offer from the Koch equity division of their company the most attractive.”
Others in the industry, however, including ex-Time staffers, believe that it would be “naive” to think that the Koch brothers won’t have any influence on the future of the publications.
Meredith says Koch brothers will have “no influence” after Time Inc deal despite putting in $650 million. Koch spox calls investment “passive.” Really? https://t.co/ZNMvcTN9oz
— Michael Calderone (@mlcalderone) November 27, 2017
All of the drama and conjecture surrounds a fundamental truth at Time Inc: the company is in financial trouble.
The most recent quarterly report shows a drop of 17% in its print advertising revenue, while newsstand sales of its magazines also plummeted by 22%. Revenue from new subscriptions suffered as well, down eight percent. And this quarter is more the norm than the outlier. In recent years, the company has been battling the changing media landscape much like many other print media outfits.
The company has been drained so much that many of Time Inc’s layoffs for 2017 were done in an effort to save $400.00 million. The methods used to attain this goal–job cuts, spin-offs and sales of publications, and closing down brands–are likely to continue under Meredith’s ownership.
Time Inc November Layoffs 2017: 200 Job Cuts, Editorial Staff Hit the Hardest
One of the largest rounds of layoffs occurred in November, where reportedly 200 jobs had been cut. The Time Inc layoffs November 2017 were the latest addition to the company’s attempts to right the ship following ad revenue declines.
The layoffs are largely Time Inc editorial staff job cuts, with about half of the 200 employees who were let go being from the editorial department. The company had about 7,450 workers earlier in the year, with that number taking successive hits via the recent layoffs.
Time Inc Layoffs October 2017: Over 50 Employees Eliminated, Part of Voluntary Buyouts & Job Cuts
As part of Time’s cost savings plan, the company cut between 50 and 75 employees last month. Through a combination of Time Inc’s voluntary buyouts and straight job eliminations, the company made a further reduction to its workforce.
Time Inc’s October layoffs for 2017 also hit the editorial department, as well as other areas of the business. This came on the back of the company shopping itself, looking to make a sale that eventually culminated in the Meredith purchase. The company was also reportedly shopping around several magazines at the time.
Time Inc Layoffs June 2017: Cost-Cutting Measures Led to Job Cuts
One of the biggest hits to the Time workforce came when the company reduced its global staff by four percent in June.
About 300 positions were culled through cuts and buyouts, representing one of the largest number of Time Inc layoffs in 2017 so far.
The company once again mentioned the need to reduce cost and save money, mentioning that these Time Inc June layoffs 2017 were steps towards putting the company in the black in the face declining revenue across the board. The Time cost-cutting measures were labeled as necessary by company executives.
In a memo written to staff, President and CEO Richard Battista wrote that these job sheds were made in order to make the company, “more efficient and to reinvest resources in our growth areas as we position the company for long-term success.”
“As I’ve mentioned many times, Time Inc. is a company in rapid transformation in an industry undergoing dynamic change,” he added.
The cuts were the result of low circulation rates and the aforementioned revenue declines that had long been plaguing Time.
The company also said in April that it had stopped looking for an acquisition deal, a position that changed sometime between then and Sunday when the Meredith buyout was announced.
Time Inc Layoffs January 2017: 30 Job Cuts from Advertising Sales Department
In what turned out to be a sign of worse things to come, the year started off poorly for the company, with the 2017 layoffs getting an early jump out the gate with 30 cuts from the advertising sales department.
Reports came out that the reorganization was not going well, and the cuts reflect how the company entered the year already on the back foot.
The Time Inc January layoffs for 2017 were by no means the largest of the job cuts to visit the company again and again throughout the year, but they were significant in that they showed just how far the company had to go in 2017.
The Time Inc advertising sales job cuts were also significant in that they targeted one of the areas floundering the most within the company, advertising. Some high profile employees were also cut, including Ron King, senior vice president of fashion, multicultural and shelter, and Kevin Martinez, vice president and group sales director for InStyle and StyleWatch.
The end result is a company that is struggling deeply with its financial present and future.
While the purchase by Meredith is being praised on Wall Street with a jump in both companies’ stocks, the acquisition may ultimately have accelerated the deaths, sales, or re-branding of several of Time’s most prominent publications, with potentially more Time Inc layoffs for 2017 to follow.
Meredith looking to dismantle Time Inc after $2.8bn takeover,” Financial Times, November 27, 2017.
“Time Inc. Cuts Continue, Between 50 and 75 Employees Out,” WWD, October 26, 2017.
“Time Inc. cuts 300 positions,” CNN, June 13, 2017.
“Time Inc Chops 30 People From Its Payroll, Makes Changes to Fashion Sales Group,” Mediawire, January 18, 2017.
“More Questions About the Kochs and Time Inc.: DealBook Briefing,” The New York Times, November 27, 2017.