Time Warner plans restructuring, to axe 600 jobs

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New York, October 29: : Time Warner Inc's Time Inc, the world's largest magazine company, plans a restructuring that could lead to as many as 600 job cuts, or about 6 per cent of its work force.

The move comes in response to the onset of the world financial crisis, which is aggravating an already difficult decline in advertising spending at US newspapers and magazines, particularly as more people shun printed publications in favor of free information on the Internet.

It affects some of the most well known US magazines, including the Time weekly news magazine, People, Sports Illustrated and Fortune. All these titles are part of parent company Time Warner Inc, which owns the AOL Internet service as well as CNN, the popular cable news television network.

"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."

"It's important that we at Time Inc react quickly to this new reality in order to maintain our financial strength, build our market position, and sharpen our ability to bounce back at the first signs of economic recovery," Moore wrote.

Time does not plan to close any magazines as a result of the restructuring, a spokeswoman said.

The 'New York Times' reported that 600 people would be cut, but a source briefed on the plans said the likely number would be 300 to 600.

Not all the changes have been set in stone, and some will be announced in the coming weeks. The primary import of the changes will be to group editorial and business functions under a small group of people, as opposed to the longstanding tradition of various editors and publishers holding discrete power over their respective titles.

Moore already was working on changes at Time, but had to speed them up because of the financial crisis and a possible recession, the 'Times' reported.

It is unclear what effect the restructuring will have on Time Warner's financial results, either in terms of savings or of charges to the bottom line. Time Warner Chief Executive Jeffrey Bewkes previously said that Time Inc had lagged expectations this year.

Time Inc officials declined to comment on specific changes and the number of layoffs planned.