Time Inc. on Friday shook up the editorial leadership of its most lucrative brand, telling employees that longtime People magazine Managing Editor Larry Hackett is leaving the company and will be succeeded by Entertainment Weekly Managing Editor Jess Cagle.

Mr. Cagle will also assume the newly created post of editorial director of Entertainment Weekly and oversee People.com. A new managing editor at EW is expected to be named shortly, Time Inc. said in a staff memo Friday.

Also leaving Time Inc. is Mark Golin, editor of Time Inc.'s Style and Entertainment Group, which includes People and Entertainment Weekly. Both Mr. Hackett and Mr. Golin plan to stay on for the next several weeks to help with the transition.

The shakeup to Time Inc.'s most lucrative magazine -- People is responsible for 20% of the company's revenue -- comes as the publishing giant prepares to spin off from parent Time Warner in the second quarter of 2014. It also follows the reorganization of Time Inc.'s reporting structure in October, when the managing editors at Time Inc. titles began reporting to their respective group presidents rather than a company editor-in-chief. (Managing editor is the top editorial position at most Time Inc. titles.)

In an interview with Ad Age on Friday, Mr. Hackett, who said he learned of the news "a couple of days ago," cast his exit as the result of management's search for ways to transform the company.

"This was the result of conversations," Mr. Hackett said, referring to Norm Pearlstine, Time Inc.'s chief creative officer, and David Geithner, president of the Style and Entertainment Group. He declined to say when the dialogue began. "Of course, in the end, this is always your boss's decision," he added. "But I have absolutely no problem with it whatsoever."

He also cited his long tenure at People, where he has worked for the past 15 years, 8 spent as managing editor. "I am grateful for the time I spent here," Mr. Hackett said. "I realize that this job requires a certain amount of energy and time that a new person can bring to it."

A Time Inc. staffer with knowledge of the situation described Mr. Golin's exit as a result of overall tightening at the company. As part of his role, Mr. Golin oversaw People's digital efforts, a responsibility that now falls to Mr. Cagle.

A regular guest on TV to talk about the celebrity beat, Mr. Cagle helped start Entertainment Weekly in 1990 after working as a reporter at People. He became managing editor of Entertainment Weekly in 2009.

"Jess's reputation for successful collaboration and strong leadership, coupled with his unmatched access and influence in the celebrity world will enormously benefit both People and Entertainment Weekly as they continue to dominate their categories," Mr. Geithner and Mr. Pearlstine said in a memo to Time Inc. staff Friday.

Mr. Cagle will continue to report to Mr. Geithner with a "dotted line" to Mr. Pearlstine, a reporting structure that is part of the October overhaul. Editors previously reported to Martha Nelson, Time Inc.'s editor-in-chief, but she left the company as editors were reassigned to business-side executives. Mr. Pearlstine, himself a former Time Inc. editor-in-chief, then returned to Time Inc. from Bloomberg in the newly created position of chief creative officer.

That reporting change came as a surprise, Mr. Hackett said, but it was not the reason for his exit.

"I think on paper one is a little suspect about such things," he said of the shift. "On the other hand, the relationship I have with David Geithner and [People Publisher Karen Kovacs] was such that we weren't getting in knots about the church and state divide. I was always comfortable with the editorial integrity and work with them to maximize and monetize what's put in the magazine, so I never worried about that.

"That said," he continued, "it's a huge change in the way Time Inc did business, and I think the success of this formula will be determined as we go forward."

In a memo to staff Friday, Mr. Geithner and Mr. Pearlstine heaped praise upon the departing editor of People. "During his fifteen year tenure, Larry's accomplishments have been innumerable," they wrote. "His commitment to respected journalism, creative insights and brand acumen have revitalized and stabilized People during a time of unprecedented competition. ... We are grateful for his editorial vision, contributions to People's business efforts and collegial leadership."

Although People remains a revenue-driver for Time Inc., it hasn't been immune to the persistent winds affecting the magazine industry. Its overall circulation has remained mostly steady, but single-copy sales in the first half of 2013 declined 11.8% from the period a year earlier to 828,590, according to the Alliance for Audited Media. Despite the losses, People remains among the top-selling magazines at newsstands.

Print ad pages at People climbed 0.9% last year, according to the Publishers Information Bureau. Entertainment Weekly saw ad pages increase 5.8% last year.