'FAMILY CIRCLE,' 'YM' HIT HARDEST IN G&J LAYOFFS

CEO Says Cuts 'Concluded'; Reveals Profit-Sharing Payouts Were Curtailed

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NEW YORK (AdAge.com) -- Family Circle, Gruner & Jahr USA Publishing's largest magazine, suffered the most editorial side cuts in the round of layoffs announced yesterday, while Child suffered no reductions, according to insiders. Teen title YM was said to have taken the second-largest hit.

Meeting the 'dollar goal'
"We met our total dollar goal," said

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Russell Denson, G&J's president-CEO. "It was, obviously, a difficult day."

Mr. Denson and a company spokeswoman declined to comment on how the layoffs impacted specific titles, although Mr. Denson said the layoffs and the eliminations of open jobs resulted in "80-some-odd" positions being cut.

Last month, Mr. Denson outlined in a company memo a goal to slash costs by $25 million that he said would bring profits margins to 10% if revenues held steady. (G&J's 2003 revenues were around $400 million.) Of those cuts, the memo said, $12 million had "to come from 'top-down' changes, which are about finding ways to be more successful with less people."

Mr. Denson said today's cutbacks marked the conclusion of that cost-reduction process.

Improved quality of life
Mr. Denson said that a return to greater profitability would mean a substantially improved quality of life for surviving G&J employees, who have been subjected to salary freezes and, for the past two years, received no payouts from the company's profit-sharing plan.

In light of Mr. Denson's goals for G&J profitability, speculation continues to swell over the fate of its ailing teen title, the money-losing YM.

Ad pages down 42%
That magazine was badly stung by advertiser backlash to recent revelations of significant circulation overstatements as well as a deep malaise affecting the entire teen-magazine category. Through September, according to Media Industry Newsletter figures, YM's ad pages were down 42.2%.

Asked about whether the company would consider exploring a sale of YM, Mr. Denson said, "We are still doing what we've been saying we are doing. We are looking for the best possible publishing formula for YM."

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