Conde Nast imposes pay cuts, reduced hours amid coronavirus
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Conde Nast, the magazine publisher behind the New Yorker, Vanity Fair, GQ and Vogue, has become the latest media company to impose pay cuts and reduced worker hours in response to the coronavirus.
CEO Roger Lynch on Monday said a temporary pay reduction will affect between 10 to 20 percent for all employees making at least $100,000. It will become effective May 1 and extend to the end of September.
Lynch said he himself was going to take a 50-percent cut in his base salary and that other top executives — which would include Conde artistic director and Vogue editor-in-chief Anna Wintour — will see their pay cut by 20 percent.
Some positions will move to three- and four-day workweeks and there will be an undisclosed number of layoffs beginning in May, Lynch added.
The cuts at Conde, owned by the Newhouse family’s Advance Publications, apply to 6,000 employees globally. The employees are evenly divided between the United States and its far-flung global ventures which also included Vogue editions in France, Italy and China.
“It’s very likely our advertising clients, consumers and therefore our company will be operating under significant financial pressure for some time,” Lynch said in the memo. “As a result, we’ll need to go beyond the initial cost-saving measures we put in place to protect our business for the long term.”
As to cutbacks, he said, “Many of you have been asking whether there will be any job eliminations. While we consider it a last option, we do expect there will be some role eliminations as part of these efforts. We’ve already closed several hundred open positions and limited hiring only to the most critical roles. Role eliminations are never something we take lightly, and we’ll continue to work to limit this as much as possible.”
Lynch also said the board of directors would be getting a pay cut–which was actually the first acknowledgement by Advance Publications that an outside board of directors had been installed a year ago. The closely held, family-run corporation has been losing money in recent years even before the coronavirus hit as advertisers moved to digital outlets.
The outside directors include Dominic De Sole, former chief executive of Gucci; and Mike Perlis, a former CEO at Forbes and Ziff Davis as well an investor executive with Japan’s Softbank. The board of directors was put in to help push the company in new directions as it tried to stem deep operating losses of recent years.
The family overall has been investing its money in ventures that are far and away from the ad-supported newspapers and magazines that had fueled its rise in an earlier generation.
Last month, Advance bought the extreme sports event Ironman from a private equity firm for $730 million and a year ago it spent a reported $1.75 billion to buy an educational software company, Turnitin. The parent company also owns Reddit.
Lynch was installed a year ago to replace the former CEO Bob Sauerberg and the company’s international operations and US operations were combined under one management team for the first time.
Advertisers have sharply curtailed ads in response to the coronavirus crisis. Reports say that the 20 percent of advertisers who have resumed ads have been rolling them out predominantly on broadcast and cable tv as well as social media.
Ads for monthly magazines now on newsstands were pre-sold but the future ad placements in monthly magazines could be in greater peril due to the longer lead times and the uncertainty about what the world will be like and when business will come back.
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