Meredith Corp. to Lay Off 40 Employees in Company Reorganization

Just a week after reporting record earnings per share, Meredith Corp. (NYSE: MDP) announced that it will lay off 40 employees, half in

Subscription News: Meredith Corp. to Lay Off 40 Employees in Company Reorganization

Source: Meredith Corp.

Just a week after reporting record earnings per share, Meredith Corp.  (NYSE: MDP) announced that it will lay off 40 employees, half in New York, 10 in Des Moines and the remaining 10 at other locations, reports ABC News. Art Slusark, spokesman for Meredith, said the staff cuts are part of the company’s overall reorganization which included promotions, new assignments and a 1 percent reduction of the company’s 3,800-member workforce.

On January 25, Meredith reported record earnings for the second quarter of its fiscal year 2017, and on January 30, Meredith’s board of directors raised shareholder dividends 5.1 percent to $2.08 per share on an annualized basis, an increase of $0.10 per share. The next dividend is payable on March 15, 2017.

Owner of popular consumer brands including EatingWell, Parents, SHAPE, Parents and Better Homes & Gardens, Meredith Corp. says it reaches more than 100 million unduplicated women every month, including almost 75 percent of millennial women in the U.S. In addition to its online and print publications, Meredith offers more than 3,000 branded products at Walmart, and it owns or operations 17 television stations in markets across the country, reaching 11 percent of U.S households.

Subscription News: Meredith Corp. to Lay Off 40 Employees in Company Reorganization

Source: Meredith Corp.

Meredith is just one of many publishers playing the reorganization game as they try to figure out the best model for each brand. In December, for example, Conde Nast announced it would cease the print edition of Self magazine following its February issue. In November 2015, Conde Nast ceased the publication of Details magazine altogether, trying to pull the Details’ audience over to GQ.

Subscription News: Meredith Corp. to Lay Off 40 Employees in Company Reorganization

Source: Time Inc.

More interesting than the layoffs, however, are the rumors that Meredith may be planning a merger with Time, Inc. (NYSE: TIME). According to Bloomberg, Meredith Corp. has reached out to Time Inc. to discuss the possibility of a merger. Bloomberg’s unnamed source also said that other companies have indicated interest in a merger in Time Inc., but no meetings have yet been set. Bloomberg reports that the Time Inc. board would meet in late January to discuss its options.

Meredith and Time Inc. had reportedly been in talks in 2013, says Media Post’s Publishers Daily, but nothing came of it. In the fall of 2015, Media General announced it would buy Meredith Corp. for $2.4 billion. In January 2016, however, Meredith took a termination fee of $60 million to allow Media General to back out of the deal so it could be acquired by Nexstar Broadcasting Group instead, reported Bloomberg.

Insider Take:

While the layoffs are very real to the affected employees, the staff cuts only impact about 1 percent of Meredith Corp.’s total employee count, so in terms of cost and impact, it will be minimal for the media giant. Unfortunately, layoffs are just part of the media landscape these days as companies try to navigate a digital-first world and are sometimes a business necessity.

We are much more interested in a possible merger with Time Inc., especially as Time is struggling with a much larger reorganization. Last fall the company announced executive leadership changes to help the company transform itself into a multi-platform, multimedia enterprise. It could benefit from Meredith’s solid financial position as well as its expertise in growing digital revenue.  

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