Reader’s Digest Association is wielding the ax again.
Some 40 staffers at RDA’s recently divested Weekly Reader group in the White Plains, NY, office were given notices that their jobs would be terminated. Under New York law, companies must alert employees 90 days before layoffs involving 25 or more workers.
It was RDA that sent the so-called WARN notices to employees even though the company finalized the sale of the group to Scholastic last month. Under the sale terms, RDA was to continue operating the unit through the end of the current school year in June.
Scholastic has never said how many of the roughly 100 employees will be retained, and it’s possible that some of the 40 in the White Plains office will be offered jobs by Scholastic.
“We’re still working on it,” said a Scholastic spokeswoman.
It wasn’t a particularly happy day at Scholastic headquarters yesterday after the company got confirmation that J.K. Rowling, the best-selling “Harry Potter” author, will be jumping to Little Brown at Hachette Books as she turns to novels aimed at adults.
Scholastic, alas, has no adult book imprint.
Weak AMI
Although American Media doesn’t have any looming debt payments in the near future, its latest quarterly report offered little to celebrate.
In the quarter ended Dec. 31, revenue dropped 6.5 percent to $87.9 million from $94.1 million a year earlier.
Earnings before interest, taxes, depreciation and amortization, or Ebitda, dropped to $20.9 million from $25.3 million.
“There were no surprises,” said AMI CEO David Pecker, who insisted the drop in earnings was in line with industry performance and that he had kept the board apprised of market difficulties.
Meanwhile, the industry has been buzzing about potential personnel changes at AMI. A source said that the company’s human resources chief has been telling people that up to three top editors might be shuffled as the company looks for new recruits.
Most of the speculation as to which editor is on the hot seat focuses on OK!’s Richard Spencer, who returned to the office for the first time Thursday after a surprise 10-day absence. The official reason was that he was helping a sister recover from knee surgery in New Jersey. But some insiders speculated that the absence was due to deeper tension between Spencer and Pecker.
Pecker said that the search that had some buzzing is actually to find a permanent editor for Reality Weekly as it staffs up.
Spencer did not return a call, but said in an e-mail that he planned to leave again next week on a long planned vacation.
One insider said, “We don’t know what is going on here.”
Reality Weekly, which the OK! staff is producing on the fly, is said to be the sore spot.
After a slow start, in which it was selling about 12 percent of the copies it distributed, the latest issue had a sell-through of 26 percent of the 480,000 copies distributed, Pecker said.
He said that the roll-out, while several weeks behind its goal of 1 million copies distributed, is still expected to reach that objective by the first week of April.
Buried in the earnings report was the nugget that Pecker and his joint-venture partner paid $23 million in cash to buy OK! from Richard Desmond’s London-based Northern & Shell in June. The joint venture is called Odyssey Magazine Publishing Group.
And finally, in a move that had many recalling the Elvis Presley casket photo in August 1977 that became the best-selling National Enquirer of all time, the latest issue of the Enquirer has an unauthorized photo of Whitney Houston in her coffin on the cover.
The company is upping its print run to 2 million copies to newsstands in a bid to stir controversy and boost sales.
The Elvis cover sold 7.7 million at 39 cents a copy.