To Heat Up Profits, Mags Put Freeze on Hiring

Hachette, Down 6.1%, Decides to Stop Adding Staff to Make Its Numbers

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NEW YORK (AdAge.com) -- Magazine publishers striving to make or beat their annual numbers are digging out an old tool for late-year cost containment: the hiring freeze.
Jack Kliger
Jack Kliger

Hachette Filipacchi Media U.S., where ad pages through August are down 6.1%, according to TNS Media Intelligence, has a freeze under way. And at Time Inc., where pages are off 2.9% through August, the heads of finance and human resources have gotten together over the past month to look at all open positions; which vacancies actually get filled will be up to four executives who report directly to Chairman-CEO Ann S. Moore.

Not a sign of layoffs
Hiring freezes and slowdowns don't signal layoffs, but they reflect a little bit about a company's fortunes. They drag morale down, too, partly because they have, of course, sometimes preceded layoffs. Time Inc., the country's largest publisher, announced an official hiring freeze in August 2005, for example, that lasted through year-end; from December through April, it eliminated 450 jobs.

Freezes also are bad news for the refugees from this year's plentiful magazine shutdowns, which include Cargo, Shop Etc., For Me, Weekend, Celebrity Living Weekly, Shape en Espanol and MPH.

This year has forced publishers into many tough decisions, as pages from the crucial auto category withered away for many titles. But ad pages promoting technology and drugs and remedies are up. Given the kind of growth publishers must produce just to keep up with rising expenses, the overall business has proved dicey for many.

Meeting financial expectations
And given the uneven ad market for magazines, hiring restrictions may be among the most palatable ways to help meet financial expectations.

"As a morale thing, it's terrible," said a former Time Inc. executive. "But it is certainly a financial lever. In these kinds of times, whether they do it as a hiring freeze or just as a more stringent screening process, it almost ought to be an ongoing thing."

Then, too, sometimes executives use hiring freezes to send a message, whether to Time Warner and Wall Street in the case of Time Inc. or to France's Lagardere Group in the case of Hachette, that they are serious about beating their budgets into shape.

Do not expect a thaw until 2007.
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