Time Inc. wants the ability to outsource nearly 200 editorial jobs overseas, according to the Newspaper Guild of New York, which has been locked in an 18-month-long contract negotiation with the nation's largest magazine publisher, owner of People, Sports Illustrated and InStyle, among others.
"Time Inc.'s proposal to hollow out its own company is simply not acceptable," Newspaper Guild of New York President Bill O'Meara said in a statement Friday. "Management wants the ability to send 160 editorial jobs overseas, which would be a massive blow to some of the nation's most important and respected magazines."
When asked whether Time Inc. plans to outsource 160 editorial jobs, a Time Inc. spokesman declined to comment.
In an Aug. 5 filing with the Securities and Exchange Commission, Time Inc. hinted at outsourcing staff, saying it is taking steps to streamline "our organizational structure to drive operational efficiencies, including through global sourcing of staff."
The Guild said Time Inc. also plans to "further consolidate editorial functions across its magazines and end healthcare benefits for retirees."
The Guild's statements on Friday came 36 hours after the two sides last met. In a letter to the Guild, an attorney representing Time Inc. said they reached an impasse after the company delivered a "last, best and final" offer to the union, which represents roughly 200 newsroom employees at Sports Illustrated, Time, People, Fortune and Money. The sides have met more than 25 times.
Mr. O'Meara described some of Time Inc.'s proposals as "outrageous" and "illegal."
"We are filing charges over these labor law violations to force management to return to the bargaining table and negotiate in good faith," he said.
The Time Inc. spokesman said industry challenges -- such as declining print revenue, cratering newsstand sales and intense competition in the digital space -- require Time Inc. to transform the way it does business.
"It's essential for Time Inc. that any agreement with the Newspaper Guild recognizes the new realities of the media industry, which has changed dramatically and continues to rapidly evolve," the spokesman said in an email.
"We must have the flexibility necessary to position ourselves for growth and success -- not just for the 200 members of the Guild, but for all Time Inc. employees worldwide," he added.
Amid these negotiations, Gawker published a document last month showing that Sports Illustrated evaluates writers for its website partly on how "beneficial" they are to advertisers. Norman Pearlstine, chief content officer at Time Inc., dismissed the incident as "not a big deal."
"I don't think it has anything to do with editorial independence and editorial integrity," Mr. Pearlstine told New York magazine. "But if I'm the Guild and I think I can leak a document to get reporters' attention, this was a nice one to leak."
Mr. Pearlstine was named chief content officer amid a historic restructuring last year, when editors were told to report to business-side executives instead of a company wide editor-in-chief, as had been the practice for decades.
But Time Inc. is attempting to steer its way through rough waters for print-based media companies. Print advertising sales and circulation are declining industry-wide and digital-ad revenue is failing to keep pace, despite a surge in digital readership.
In June, Time Warner spun off Time Inc. from its more profitable entertainment businesses, such as Turner Networks, HBO and Warner Bros. That has left Time Inc. to fend for itself as a publicly traded company, and the publisher has moved fast to introduce new products, particularly around video. But it's also shed employees across its magazines, with layoffs claiming hundreds of staffers this year alone.
To help lower its costs, Time Inc. is moving its offices to Lower Manhattan. The company received millions in subsidies from the state of New York for the relocation. The Newspaper Guild called attention to this fact in its statement Friday.
Time Inc.'s second quarter revenue was down 2% to $820 million.