“Challenge unlike we have seen before”
According to an article by the Financial Express, Time Warner faces challenges because of the recent fall in the economy. It plans to restructure, which will cut approximately 600 jobs.
“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,” Time Inc Chairman and Chief Executive Ann Moore wrote in a memo on Tuesday to employees that was obtained by Reuters.
She said it was a challenge “unlike any we’ve seen before.”
There has been an increasing decline in advertisement spending in U.S. magazines and newspapers. People would rather read free information online than buy it in print. (Here we are reading and writing blogs as they speak!)
This will affect popular magazines, but they will not be closing any of them at this time. The information is not permanent right now, changes differ from day to day with each decision made. The number of employees cut may be between 300-600. The company is also talking about selling their AOL unit to Yahoo.
The positive aspect of this restructuring will be that they will have more opportunities to focus on their Internet-based publics. The plans are to categorize the 24 magazines and websites into three umbrellas: news, style and entertainment, and lifestyle properties.
Positive for PR majors: “Time Inc also will create an advertising sales and marketing group to handle sales across all of Time’s magazine brands, something Moore said was critical because of the difficult ad sales environment. The unit will be run by Stephanie George, also a Time executive vice president.”