The Des Moines, Iowa-based publisher confirmed that 50 staffers had been laid off at its national media group, which includes brands such as People Magazine, InStyle and Entertainment Weekly, and 130 people had been let go at its local media group, comprising many broadcast channels.
“Today, Meredith announced initiatives to address the ongoing COVID-19 crisis and position our business for continued growth. These include cost-control measures as well as a reallocation of resources to higher-growth areas,” a spokeswoman said. “As noted on our full-year 2020 fourth-quarter earnings call, while we’re seeing slight improvement, advertising remains significantly below our historical norms.”
She stressed that the company will focus on adding new skill sets to its national media group, particularly in digital. For its local media group, Meredith will combine all master control into its Atlanta location and will centralize all graphic design and creative services.
Like much of the media industry, Meredith has been grappling with a free fall in advertising, with coronavirus-related ad cancellations and delays wiping an estimated $136 million off its fourth-quarter revenues. This is despite increased audience engagement.
To counter the slide in ad revenues, it has implemented a number of cost-saving measures over the past few months, but until now that hadn’t involved layoffs.
Those measures included cutting salaries for 60 percent of its 5,000 staffers in May. Around 45 percent of those impacted received a 15 percent pay reduction, while the remaining 15 percent, made up of Meredith’s highest paid employees, took pay cuts of between 20 and 40 percent. It’s understood full pay was reinstated on Sept. 5.
It also paused its dividend, which Meredith will look to resume paying once advertising market conditions improve.
This is all happening at the same time as executives are preparing for the group’s annual meeting on Nov. 11, where it will seek shareholder approval of an amendment to its charter that would increase options for a separation of its national and local media groups, although it stressed in a statement that it has no immediate plans to split into two.
“The proposed amendment is not in response to any specific conversations or events,” Meredith said last week. “Instead, the company believes it is a prudent step to increase the number of options available. There is no timeline for nor assurance of a potential transaction resulting from this proposed charter amendment.”
If such a move does happen, analysts believe the hope is that it will improve shareholder value.
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People Magazine Owner Meredith Unveils Cost-Cutting Measures