More job cuts could soon hit Time Inc., company executives told their top 300 managers at a quarterly meeting on Monday.
The warning came during a question-and-answer session with Norm Pearlstine, Time Inc.'s newly appointed chief content officer. Asked by Time magazine Managing Editor Nancy Gibbs whether there will be layoffs, Mr. Pearlstine answered "yes" and said the decision would be a difficult one.
"He spoke compassionately," said one Time Inc. staffer who attended the meeting.
Time Inc., publisher of magazines such as People and Sports Illustrated, began the year by cutting about 5% of its workforce, about 500 positions, in its biggest staff reduction since 2008. It is entering 2014 trying to get in shape for its spinoff from parent company Time Warner.
Third-quarter revenue at Time Inc. decreased 2% to $818 million, fueled by a 4% decline in subscription revenues and 2% drop in ad revenue.
A Time Inc. spokeswoman declined to comment for this story.
Contrary to a report this weekend, the spinoff is still on track for the second quarter of 2014, according to Time Inc. CEO Joe Ripp, who appeared at the meeting along with Mr. Pearlstine and Chief Financial Officer Jeff Bairstow. The website 24/7 Wall Street wrote Saturday that the separation will mostly likely be delayed until the second half of next year to give Time Inc. time to overcome poor financial results coming in the fourth quarter.
The move, originally envisioned for this year, has already been delayed once.
Mr. Ripp was said to be more direct than usual and even adversarial at times, shedding at least for the moment the folksy personality for which he's become known. "He was a little more fiery than usual," said another person who was present at the meeting.
At least twice during the meeting, he referred to a five-year strategic that plan Time Inc. would soon put in place, according to staffers, and said that staffers who weren't on board with the plan might as well leave.
In a bit of good news for Time Inc. staffers, executives said employees will receive merit pay increases in February, something most didn't see last year. Mr. Ripp also said People magazine will soon be printed on higher quality paper stock. People is Time Inc.'s top magazine, generating roughly 20% of the company's total revenue, according to a recent filing with the Securities and Exchange Commission.
And executives asked employees to think bigger in terms of possible investments the company could make. Group heads' recent suggestions on that front were too small, the executives said.
"They asked for our biggest, craziest ideas," a third attendee said.
In a staff memo sent after the meeting, Mr. Ripp said "the collective excitement for our future" was starting to build. "We are also making good progress on selecting a board, finalizing our five-year strategic plan and acquiring the right talent to help us operate as a public company," he wrote.
"We must reengineer how we operate our business, look at all our processes and see where we can be more efficient," he added. "Our revenue has declined 30% over the past five years, newsstand trends are not good and this company has been shrinking without investment for too long. We need to get ahead of the curve if we are going to attract a strong shareholder base."
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