Condé Slash: At 4 Times Square, ‘10 Percent’ New Budget Buzzwords

Back in October 2008, Condé Nast made one of the broadest, most sweeping cuts in company history: Executives asked publishers and editors to eliminate 5 percent from their magazines budget lines. But as June issues loom with no sign of improvement to the economy, management is facing the brutal reality that 5 percent is not enough. 

“We half-assed the cuts last year,” said one Condé Nast publisher.

All Condé Nast publishers and editors have been told by the chairman, Si Newhouse, and the CEO, Chuck Townsend, in the past two weeks to cut yet again, the majority being told to cut 10 percent from their non-salary, discretionary budgets, according to five Condé Nast sources with direct knowledge of the budget cuts. While there is no official deadline, all publishers and editors contacted for this story said these shrunken budgets would be finalized by the end of the month.  

The “discretionary budget” includes items like messengers, first-class airfare, cocktail parties, car services (months ago, New Yorker editor David Remnick voluntarily gave up the personal car service he was given when he was hired; no word on whether he’s been issued a Metrocard)—in other words, all the comforts and luxuries that have always made 4 Times Square a legendary place to work. Several publishers and editors, two sources added, are considering budget proposals where they’ll slice salaried positions as well. In October, publishers and editors simply eliminated unfilled jobs; this time, layoffs might be unavoidable.

“There’ll definitely be trimming,” said an insider.

Though layoffs within the company aren’t expected to be dramatic, they are likely to happen at a handful of books, both on the editorial and publishing sides. “Onesies and twosies,” said a highly placed company source—meaning number, not rank. Advertising Age reported on Tuesday, March 17, that the Condé Nast Media Group, which published Fashion Rocks (which suspended publication this year) and is run by veteran Richard Beckman, will be hit hard by layoffs, and they’re coming as soon as this week. Asked for specifics, spokespeople at Vanity Fair and Vogue referred Off the Record to corporate spokeswoman Maurie Perl, who issued the following statement from Mr. Townsend, the CEO: “As a private company we are not about to disseminate specific financial information but be assured we are continuing to responsibly and successfully manage our way through this extended recession.”

Evidence of the recession is stark. Along with lost ad pages—47 percent at Architectural Digest, 32 percent from Vanity Fair, 56 percent from Wired and so on—the page count and the amount of content at the majority of Condé Nast’s titles is shrinking, too. Contracts with writers are also being reconfigured for several titles, two sources said. Those used to getting monthly checks, regardless of word count filed, may now only be paid after stories are completed.  

In meetings, Mr. Newhouse and Mr. Townsend have stressed that the cuts should come from areas that aren’t visible to the reader—you can cut a car service, cut your expenses and meals, maybe even a staffer, but don’t damage the magazine’s product overall.

“The company has really tried very, very hard not to cut anything, particularly people,” said a publisher. “If you look at every other publishing company, they’ve had major layoffs. We’re kind of the last ones, and it’s not even that major. In the scheme of things, it’s not that crazy. Everyone is doing it, and we’re doing it last.”

Condé Slash: At 4 Times Square, ‘10 Percent’ New Budget Buzzwords