The massive layoffs at Time Inc. announced last week are expected to be the first of several dramatic changes as Chairwoman-CEO Ann S. Moore faces increasing pressure from parent company Time Warner to keep the publisher’s numbers growing amid a volatile advertising market.
Last Tuesday, Time—the world’s largest magazine publisher, with more than 150 titles—slashed 105 employees from its rolls. The cuts included some high-ranking, longtime executives. Among those let go were Jack Haire, exec VP in charge of corporate ad sales; Richard Atkinson, exec VP in charge of the news and information group; Eileen Naughton, president of the Time Group; David Kieselstein, president of the Parenting Group; Fred Poust, who ran corporate ad sales under Haire; and Steve Buerger, who also worked in corporate sales.
“This is not just about cost-cutting,” said Dawn Bridges, director of corporate communications at Time Inc. “The company’s management structure was very top-heavy through a number of acquisitions in the last 15 years.” These acquisitions include IPC Media, the largest consumer publisher in the U.K.; Essence Communications; Times Mirror Magazines and Southern Progress Corp. Bridges said she could not comment on whether there would be additional job cuts.
Moore named Nora McAniff, exec VP-women, entertainment and luxury group, and John Squires, exec VP-sports and leisure group, to serve as co-chief operating officers, the first in the company's history.
Squires will also oversee the soon-to-launch CNNMoney.com, which will merge the financial sites CNNMoney.com, Fortune.com, FSB.com and Business2.com into a single Web site. The site, which will also draw content from Business 2.0, Fortune, Fortune Small Business and Money, will immediately become the second-largest financial portal, trailing only Yahoo!, according to Bridges.
“We’re putting a lot of human and financial resources [into the site] for edit, technology and ad sales,” Bridges said. (Greg Schwartz, who was previously national accounts director, automotive & finance for Yahoo!, has been named VP-ad sales for CNNMoney.com.)
With the launch of CNNMoney.com, Time is hoping to re-charge some of its business-oriented magazines that have been struggling ad-wise. For example, through November ad pages for Fortune fell 10%, while ad pages were off 9% for Business 2.0 and 2% for Money, according to the Publishers Information Bureau. The exception was Fortune Small Business, which through November was up 9% in ad pages. The increase for Fortune Small Business perhaps reflects the ongoing push by blue-chip marketers to target the small-business sector.
Ad pages for flagship Time dropped 14% through November.
Reed Phillips, a partner in the media investment firm DeSilva & Phillips, said that in the wake of the job cutbacks some of Time’s business books, with the exception of Fortune, may now be vulnerable. “With pressure on the bottom line, underperforming titles may be closed,” Phillips said.
Phillips added that the management changes will enable Moore to assert more control over Time, compared with her predecessor, Don Logan, now chairman of Time Warner’s Media & Communications Group, who preferred a more decentralized approach. “She’s getting pressure from [Time Warner Chairman-CEO] Dick Parsons, who’s getting pressure from [financier] Carl Ichan to hit the numbers.”
The job cuts at Time Inc. come as Time Warner braces for a fight with Icahn, whose group owns 2.5% of Time Warner shares. Ichan has proposed splitting the company into four pieces and has announced plans to replace the current board of directors. He has also demanded a full spin-off of Time Warner's cable assets and a $20 billion stock buyback. Steve Case, former chairman of Time Warner, who engineered the AOL-Time Warner merger in 2000, has also called for the company to be broken up.