NEW YORK (AFP) - Magazine publisher Time Inc. is cutting staff and consolidating operations ahead of a spinoff as an independent company, according to an internal memo.
The memo seen by AFP did not specify the number of jobs, but some reports said the figure would be around 500, or six per cent of the workforce.
The moves come ahead of a spinoff of the magazine division by media conglomerate Time Warner, which is to be completed in the second quarter, according to updated guidance Wednesday in a Time Warner earnings release.
"Today, we are beginning a restructuring process that will move us in the right direction by: eliminating our three brand operating clusters; streamlining decision-making across the entire organization; and completing the integration of American Express Publishing," Time Inc. chief Joe Ripp said in the memo to staff.
"We will be eliminating a number of redundant positions and moving the team into the Time & Life Building," the memo added. "It is always difficult when we see colleagues leaving the company. 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."
The Wall Street Journal reported on Tuesday that cuts will be spread across Time, affecting the American Express titles such as Travel and Leisure and Food & Wine, which Time acquired last year.
Time Warner announced plans in March for a "complete legal and structural separation of Time Inc. from Time Warner" which would make the publishing unit "an independent, publicly traded company." The titles of the publishing unit include Time magazine, People, Fortune and Sports Illustrated. It has several international magazines including global editions of Time and Fortune and publishing operations in Britain and Mexico.
The publishing industry is grappling with a steep drop in print advertising revenue, steadily declining circulation and the migration of readers to free news online.
Time Warner reported a profit of US$983 million in the fourth quarter on record revenues of US$8.6 billion. For the year, profits were up 26 per cent at US$3.7 billion on US$29.8 billion in revenues.