People magazine owner Meredith cuts pay, furloughs 3K employees
Meredith Corp., the nation’s largest magazine publisher, is reducing pay and furloughing about 60 percent of its 5,000 employees as the coronavirus continues to crush ad budgets.
The cutbacks at Meredith, owner of People, Better Homes & Gardens and 17 local TV stations, kick off on May 4 and stretch to September 4.
Pay cuts will start at 15 percent, hitting 45 percent of staffers or about 2,250 people, who will also be furloughed one day per week.
Meanwhile, pay reductions of 20 percent to 40 percent will affect higher-paid staffers, or roughly 750 people. Roughly 40 percent of lower-paid staffers will be spared.
President and CEO Tom Harty and members of the board will receive a 40 percent pay cut.
The publicly traded company also said it will suspend its dividend payment until further notice.
“The board remains committed to paying a dividend over the longer-term and would seek to resume Meredith’s dividend policy when advertising market conditions improve,” the company said.
Meredith became the nation’s largest magazine publisher after buying Time Inc. in 2018 for $2.8 billion.
One of its biggest rivals in the magazine world is Hearst, publisher of Cosmopolitan, Esquire and Harper’s Bazaar, which said in early April that it’s not laying off any employees and even gave them a 1 percent pay hike.
Roger Lynch, CEO of Condé Nast, publisher of Vogue, Vanity Fair and The New Yorker, said last week the company would be cutting pay by 10 percent to 20 percent for all employees making at least $100,000, starting May 1 to the end of September. The cuts are expected to hit roughly 6,000 staffers globally.
Lynch said he would be taking a 50 percent cut in his base salary and that other top executives — including Condé artistic director and Vogue Editor-in-Chief Anna Wintour — will see their pay cut by 20 percent.
At Meredith, one bright spot remains — its women’s lifestyle magazines, where renewals have been “above expectations,” Harty said.
Also, newsstand sales from major retailers and grocery store chains are still offsetting declines in airports, transit hubs and bookstores. And digital traffic to its magazine sites were up 40 percent so far in April.
On the TV front, traffic to local digital news sites was up 50 percent while viewership to morning, evening and late newscasts was up anywhere from 15 to 40 percent.
“Given recent lifestyle changes, our content is particularly relevant now as more Americans are spending time at home and are demonstrating expanded interest in DIY, food and entertainment as well as local news programming,” said Harty. “At the same time, the COVID-19 crisis has created an extremely challenging business environment, including significant advertising cancellations and delays.”
About 55 percent of the company’s revenue is derived from advertising.
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