Time Inc. has begun laying off employees as part of a broader restructuring at the company, CEO Joe Ripp said in a memo to employees Tuesday morning.
A spokeswoman for Time Inc. declined to discuss the number of layoffs, but Mr. Ripp said in his memo that David Geithner, exec VP-president of the Style and Entertainment Group, and Ed Kelly, CEO of American Express Publishing, were leaving. Many of the job losses will come from redundancies created when Time Inc. bought American Express Publishing, which includes Travel + Leisure and Food & Wine, according to Mr. Ripp.
Mr. Geithner, the younger brother of former Treasury secretary Timothy Geithner, had been on the rise in the days following the abrupt end of former CEO Jack Griffin. Mr. Kelly had been CEO of American Express Publishing since 2000.
The ultimate number of cuts will be less than 500, according to a person familiar with the process, with many of the layoffs occurring today.
American Express Publishing, which Time Inc. acquired last year, employs roughly 400 people. Those left after the layoffs will relocate to Time Inc.'s headquarters. Including American Express Publishing staff, Time Inc. employs roughly 5,000 people in the U.S. and 2,800 abroad.
As part of the restructuring, Time Inc. is eliminating its three magazine groups -- News and Sports, Style and Entertainment and Lifestyle -- which have each been led by a separate exec VP reporting to Mr. Ripp. As head of the Style and Entertainment Group, Mr. Geithner, a 21-year veteran of Time Inc., had overseen a portfolio including company powers such as People and InStyle.
Todd Larsen, exec VP and president of the News and Sports Group, and Evelyn Webster, exec VP and president of the Lifestyle group, will now divide the company's portfolio but work together to oversee it, according to Mr. Ripp.
Mr. Larsen will manage brands including People, Entertainment Weekly, Time, Sports Illustrated, Fortune, Money and Golf. Ms. Webster will manage All You, the biannual AmEx title Black Ink, Cooking Light, Coastal Living, Departures, Essence, Food & Wine, Health, InStyle, People StyleWatch, People en Espanol, Real Simple, Southern Living, Sunset, This Old House, Travel & Leisure and IPC Media, the company's U.K. division.
"A single Time Inc. portfolio will give us more operational flexibility, speed decision-making and spur the development of new cross-brand products and revenue streams to help stabilize and grow our top-line revenues," Mr. Ripp said in the memo.
Time Inc. also announced the promotion of Mark Ford, exec VP and president of Time Inc.'s Sports Group, to the role of exec VP, advertising sales, a role similar to that of chief revenue officer, a post vacated last year that Mr. Ripp has now decided not to fill. Mr. Ford will lead overall advertising sales, including Time Inc.'s Branded Solutions, Content Solutions and MNI Targeted Media, according to Mr. Ripp. "He will also lead our development of new forms of advertising, collaborate with our Chief Technology Officer on ways to leverage our data more effectively, and work with publishers across our brands to create new advertising opportunities for our marketing partners," Mr. Ripp said in a press release.
Today's layoffs mark the second downsizing at Time Inc. in a year. Last January, the company eliminated 500 jobs -- or about 6% of its workforce then -- under the leadership of CEO Laura Lang, who herself left later in the year. But the latest round of cuts comes as Time Inc. prepares to spin off from parent Time Warner into its own public company and are seen as a way to make the company more attractive to Wall Street. Revenue at Time Inc. slipped 2% to $818 million in the third quarter of 2013 as circulation revenue dropped 4% drop and ad revenue declined 2%.
"It is always difficult when we see colleagues leaving the company," Mr. Ripp said. "Unfortunately, as we have been doing over the last several years, we must continue to right-size the organization consistent with our current revenues. We will constantly readjust and recalibrate as we build our future. As I have frequently said in conversations with many of you, we can continue the recent pattern of annual layoffs for years to come or we can get ahead of and then reverse this trend by developing the investment capital and the ideas to restore our business."
In his memo, Mr. Ripp also referred to a possible move, underscoring earlier reports that Time Inc. had looked at office space in lower Manhattan and New Jersey.
"We will be undertaking projects in the near term to drive greater operational efficiencies and we're exploring our real estate options to find a workspace that allows us to operate more efficiently with a greater sense of community," he said.
Time Warner is scheduled to report fourth-quarter and full-year 2013 earnings on Wednesday.
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