BtoB

Slowing economy prompts job cuts in b-to-b media

By Published on .

Reprints Reprints

In recent weeks several b-to-b media companies have engaged in a number of actions, including layoffs, to brace for what's expected to be a lean year economically. Among the companies detailing plans to scale back were: *Penton Media, which instituted hiring and salary freezes as well as a cost savings initiative. *Nielsen Business Media, which let an undisclosed number of staffers go across the entire organization. *Ziff Davis Enterprise, which initiated a companywide restructuring that let an undisclosed number of staffers go, according to Steve Weitzner, who joined the company as chairman-CEO in January. In an April 10 memo to employees, John French, president-CEO of Penton, wrote: “Based on our [revenue] forecasts, we project that we will finish the year significantly below our combined company revenues in 2007.” He added: “While the decline in revenue is problematic, it is only part of the story. This year we are facing significant increases in some of our largest, fixed operating expenses, including the cost of postage and the cost of paper. The increases in these expenses coupled with the revenue decline have forced us to closely examine all of our operating costs.” French would not comment beyond the memo. Reed Phillips, a partner at media investment banker DeSilva & Phillips, said several factors have prompted the recent retrenching. “It's not just one thing,” he said. “Certainly the downturn in the economy is having an impact, and digital media is an ongoing impact. The change in credit markets is also having an impact, particularly when private equity companies own these businesses.” Phillips added: “Financial terms are a little more rigorous, and these companies need to stay in compliance with their [bank] covenants. And lot of that is done through reducing head counts.” The job cuts at ZDE are part of a companywide restructuring spearheaded by Weitzner. ZDE, whose products include Baseline, CIO Insight and eWeek, comprises the former b-to-b division of Ziff Davis Media. As part of the restructuring, Weitzner announced several changes in the company's executive ranks. “We're reshaping the company and resources to where we need to be going,” Weitzner said. “We're bringing people in and letting some people go in an effort to build out digital [media] and be more community-driven.” Around the same time that companies were announcing layoffs and cutbacks, Ziff Davis Media's future plans were revealed during Chapter 11 bankruptcy proceedings. According to documents filed in the case, Ziff Davis Media's projections for 2009 and 2010 “do not include print revenue or costs. The company and its advisers are currently exploring all options and alternatives regarding the print operations.” The comment suggests that Ziff Davis Media will either sell its print titles, which include PC Magazine, or shutter them. “As b-to-b companies get more digitally focused, they need fewer people, perhaps half as many,” Phillips said. “For that reason alone, you'll see more b-to-b media companies slimming down.” M
In this article:
Most Popular