LIKE a storm moving up the coast, the downsizing at Time Inc. that began last week in Birmingham, Ala., is about to hit New York.
While the precise number of people affected hasn’t been finalized, multiple sources say they expect it will be several hundred people from a worldwide workforce that now totals 10,200.
Yesterday, CEO Ann Moore, looking every bit like a top executive who expects to be around for years to come, unveiled a restructuring that essentially blows up the old corporate hierarchy at Time Inc. and starts fresh by splitting the company into three new business units: news, style and entertainment and lifestyle.
Each of the new units will get a new bean-counting general manager – widely expected to be responsible for the job cuts – who will report to the Time Inc. CFO Howard Averill.
Said one source, “The big winner in all this looks to be Averill.”
The new re-organization comes a week after Media Ink reported that Moore has apparently “pulled a Bloomberg” and now is indicating that she won’t retire when her current employment contract expires in early 2010.
The new structure has left most editorial-side people quaking as the extent of the cutbacks begins to take shape over the next few weeks.
No mention was made of downsizing, but as one source said, “It is a matter of when – not if – anymore.”
Said Moore in a memo distributed to employees yesterday, “As all of you are aware, industry conditions have been challenging due to the financial crisis, which has produced sharp decreases in advertising spending. This is expected to continue through most of 2009. This is a challenge unlike any we’ve seen before.”
She went on to say that “after much careful study and consultation with many of you who run our businesses, I have concluded that it is no longer possible to operate our company with the same decentralized management structure that served us so well during our many years of sustained growth.”
In the sweeping restructuring, Time Inc.’s 24 US titles will be grouped into the three business units.
News will contain the Time Group, Fortune, Money, Sports Illustrated, Life.com and the Mexican operations known as GEE. Executive Vice President John Squires will manage the unit, which is said to have some of the biggest advertising headaches in the company.
Moore, herself a veteran of People in its best years, will go back into the trenches as a line executive overseeing the style and entertainment group that includes People, In Style, Entertainment Weekly and Essence. Of course, Moore will also remain CEO of Time Inc.
The lifestyle group – which includes Real Simple, This Old House, All You, Southern Living, Cooking Light, Sunset, Health, Cottage Living, and Coastal Living – will led by Executive Vice President Sylvia Auton, who also heads the British subsidiary IPC.
Not mentioned in the memo, but expected to be gone, is Tom Angelillo, who had been running the Southern Progress wing as CEO and recently oversaw the downsizing of at least 30 people from its 1,000-person workforce.
Stephanie George, who had been sitting pretty running the women’s magazines as executive vice president, now goes to Time Inc. advertising and sales as that unit’s new president.
Brian Wolfe, who’s in charge of getting people to renew subscriptions, moves up to an executive vice president role, responsible for all circulation functions as well as Time Warner Retail, the companies’ wholesaling distribution business.
Two new executive vice presidents have been added to the roster, Kerry Bessey and Maurice Edelson.
Among the top dogs on individual magazines who are known to be leaving is Ed McCarrick, a 35-year veteran of the company and the current president and worldwide publisher of Time magazine. He’s retiring.
“This was my choice,” McCarrick, 59, said yesterday when reached at his home in New Canaan, Conn.
McCarrick is an old-school publisher, whose career was built on relationships with ad agency executives, fostered on the golf course and over steak dinners and two-martini lunches of a bygone era.
He joined the company in 1973 as a sales trainee straight out of Manhattan College and learned the craft in the far corners of the Time Inc. empire in Boston and Minneapolis before moving back to New York in the mid-1980s.
He held ad sales jobs at Time, Life and People before moving into Time Inc. corporate sales. He got his first publisher role at Life in 1993.
He moved back to Time as publisher in 1999 and added the president’s title in December 2005.
McCarrick had developed a particularly strong bond with Jim Kelly, the longtime executive editor who moved into the top editor’s job when Walter Isaacson stepped down.
“There’s nobody in the world I enjoyed more than Jim Kelly,” McCarrick said. “I mean no offense to Rick Stengel [the current managing editor], but Jim could complete my sentences for me.”
McCarrick was a second-generation ad salesman. His father worked for years at US News & World Report but died at 57, a mere six years after the younger McCarrick started working at Time Inc.
“My dad was always proud that I worked for Time. He considered it the gold standard,” he said. “And I still consider it the gold standard.”
But it’s one that has been under enormous pressure thanks to the changes sweeping the publishing world, and the defection of ad dollars to the Internet.
McCarrick said that time.com currently accounts for 12 percent of the revenue of the Time magazine brand, up from virtually nothing a few years ago. But ad pages in the print version have tumbled.
No replacement is expected to be named as president.
Good thing
Martha Stewart Living Omnimedia posted a narrower third-quarter loss despite reporting a slight dip in revenue.
The company had an operating loss of $3.5 million, compared with a year-earlier loss of $4.9 million. Revenue fell 4 percent to $66.5 million, compared with $69.3 million a year ago.
Chairman Charles Koppelman said he was “optimistic” about 2009 and unveiled plans to boost the rate base of three magazines the company publishes.
Martha Stewart Living is expected to climb over the 2 million threshold for the first time since founder Martha Stewart was sent to prison for lying about a suspicious stock sale. The magazine is now at 1.9 million and in January is expected to rise to 2,025,000.
Everyday Food, which has been slumping on the ad front, is still pushing through a hike to the 1 million level from its current circ level of 900,000. Body+Soul is moving to 600,000 from 550,000.
Stewart, appearing on CNBC yesterday, downplayed a story reported in The Post last week that there was friction between herself and co-CEO Wenda Harris Millard, who oversees the company’s publishing.
“I’m not the CEO,” said Stewart. “I’m the founder of Martha Stewart Living. I have opinions, of course, as any founder would. I’m an active participant in all the debates that go on in the company.”
Koppelman, in an interview with Media Ink, said that the company’s earnings before interest, taxes, depreciation and amortization, known as Ebitda, is “cash positive,” and that the current quarter included cash and non-cash charges of $3.5 million.
“It was a great quarter in merchandising and a great quarter in broadcasting, thanks to ‘The Martha Stewart Show,’ ” he said.