Condé Nast is rolling out a series of pay cuts and furloughs, with layoffs on the near horizon, according to a memo sent to staff.
The company expects a “low single-digit percentage” of the total global workforce — which is approximately 6,000 employees — to be laid off, a source familiar with the matter said. That could end up being close to 300 employees, depending on the severity of the situation.
The layoffs have not been announced yet, however the memo notes that those structural changes will be made by the end of May to make sure “this process isn’t dragged out.” A company spokesperson noted that the company is still going through the process of determining which roles will be included in both the layoffs and furloughs.
In the memo, Condé Nast CEO Roger Lynch wrote that Conde Nast will also furlough and reduce the work schedules of certain roles. The email did not disclose which roles would be cut. However it specified that these roles in particular would be able to benefit from certain government programs and stimulus packages in order to supplement some of their losses.
Starting May 1, employees earning $100,000 or higher will be taking temporary pay cuts until September from their base salary, ranging from 10% to 20%, with the executive leadership team taking 20% reductions, the memo said. Lynch and other external members of the company’s board of directors will be taking a 50% reduction of their base salaries.
Lynch’s note said that like most media companies, Condé Nast has experienced “a substantial impact from this crisis” on its print and digital display advertising business, leading the company to redo its financial plan for the year.
Many publishers have been dealing with declining programmatic rates despite spikes in traffic. This is in addition to falling affiliate rates on commerce content as well as publishers’ almost entirely losing live event sponsorships unless they can move to virtual ones.
“We’ll need to go beyond the initial cost savings measures we put in place to protect our business for the long term,” Lynch wrote.
Several hundred open positions were also closed this week and hiring has been reduced to what the company considered crucial roles, according to the memo.
Finally, Lynch said that there are several internal projects that will be pushed until 2021. These include moving the Finance and HR departments to financial management and human resources software Workday, moving the remaining regional editions of its brands onto its content management system Copilot, outfitting its internal events spaces globally and launching the global employee intranet.
Hearst and Meredith, two of Condé’s competitors in the magazine and digital publishing space, have yet to announce any layoffs or pay cuts and furloughs as a result of the coronavirus’ impact on the economy. Digital native publishers including Group Nine, Vice Media and BuzzFeed have all implemented a mixture of cost-saving measures.
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