Call it the Five Percent Plan.
The Observer has learned that all Condé Nast publishers and editors have been told they have to cut their staffs by 5 percent and their budgets by 5 percent within weeks, according to five Condé Nast sources.
It will affect every title, including the company’s most successful: The New Yorker, Vanity Fair, Wired, Glamour and down the line.
The plan is not just a 5 percent overall spending reduction but rather two distinct 5 percent cuts for each title, guaranteeing that titles cannot meet the goal without cutting staff.
First, each book will have to cut 5 percent of its payroll. They can do this through laying off staff or eliminating open and unfilled positions or a combination of the two.
Second, each book will have to cut 5 percent from its non-payroll budget lines: travel and expenses, meals, freelancers, etc.
This will be performed for each title twice over: once for the business side of each title and once for the editorial side.
Two weeks ago, Condé Nast CEO Chuck Townsend informed reps of all 26 titles that there would be a “hiring chill” companywide. But with several outside titles folding (Radar! CosmoGirl! 02138!) and with the ad market looking only worse, Condé Nast execs have taken the extra step of quietly informing publishers and editors that they’ll have to take a more drastic move.
“The 5 percent figure was an evolution from that,” said one Condé Nast source. “The number of open positions when they announced that was about 5 percent of the company. It became clear it had to be done on a more systematic basis.”
One magazine appears to be in line for even larger budgetary overhaul. Executives are still figuring out what to do with Men’s Vogue, and options have run the gamut, including the possibility of folding it.
One Condé Nast source said that it’s likely that the magazine will scale back from publishing 10 issues a year to running only twice a year and it will give up its entire ad sales staff, with Vogue business staff handling the work. Update, 1:20 p.m.: Confirmed: Men’s Vogue ‘Absorbed’ Into Vogue; Will Publish Only Twice a Year.
“It’ll be a small, small, small version of what it is,” said a 4 Times Square source. “And the small version will exist for nothing more than for Anna to save face.”
Our source, of course, is referring to Anna Wintour, the editor of Vogue and editorial director of the three-year-old Men’s Vogue.
The writing has been on the wall for some time at Men’s Vogue. Just take a flip through the October issue—the Obama cover—and you’ll find that ads are light, and the ones that exist are largely of one category: There are at least a dozen ads for watches.
“When you rely on your ad base in just one category, that’s a real sign of danger,” said one source. “All their eggs are in that one basket and it’s just not sustainable.”
When we asked a Condé Nast spokeswoman about the companywide cutbacks and the future of Men’s Vogue, she wrote in an e-mail, “At this time we have nothing to say.”
There has been no “freak-out memo” like the one Time Inc.’s Ann Moore was forced to send out Monday evening in advance of 600 job cuts companywide*. But then, Condé Nast does not have to demonstrate fiscal tight-fistedness to shareholders.
Which makes this broad-based companywide policy something unexpected coming from the Newhouses, the family that owns the company, and, in turn, a sign of just how bad things have gotten in the industry.
The long-running Condé Nast philosophy, many have noted, has been to place the burden of severe cutbacks on titles performing least well, and let the great performers run free. That means you, David Remnick, Graydon Carter!
But not today.
“This has a little more urgency on some level,” said a source.
* Update, 1:20 p.m.: Ms. Moore’s memo did not announce 600 job cuts; it was sent as news of the cuts was released.