On the day that Variety laid off another 15 staffers including top editors Michael Speier and Dade Hayes, president and publisher Neil Stiles told TheWrap that the leading trade is still “extremely profitable” but has plans to start charging for new online content.
Despite the new layoffs, “Variety is an extremely profitable franchise,” Stiles said. “It’s not some basket case. Is it less profitable than it was? Absolutely. Give me an American corporation that isn’t. Part of the reason we let people go is because times are tougher. We’re trying to take advantage by restructuring.”
Variety continues to struggle with depressed advertising revenues, and just last week it chose a new editor to replace Peter Bart, the highly paid, longtime leader of the newsroom. His former deputy, Tim Gray, now leads editorial.
Clearly there has been a housecleaning at the top. Speier was executive editor, and Hayes was assistant managing editor. There was no word on how -- or whether -- either would be replaced. Stiles said features executive editor Steven Gaydos and managing editor Kirstin Wilder will be staying on.
Stiles said his plan to sustain Variety would not include charging for news content on its website Variety.com but charging for “things to actually help you do your job.” He declined to give a specific example, but observed: “A company that we work with really closely, TVtracker.com, has a bunch of data points about TV development which they put online. If you’re in the TV business, that’s an absolute life line.”
Stiles said Variety’s own reporters, rather than research marketers, are meeting with industry professionals to find out what kind of online products they need and would pay for.
In a Tuesday morning email to staffers, Tad Smith, CEO of Variety parent company Reed Business Information, said Reed would be laying off 7 percent of its workforce and require remaining workers to take mandatory leave. In addition, he cautioned that the company “may need to make additional reductions to fit the business conditions,” and remaining employees will be required “to take mandatory unpaid days off.”
The memo attributed the decision to “our quarterly forecast for the full year and the revenue outlook [that] continues to concern us.” According to Smith, Reed’s financial projections are “worse than our already conservative expectations for 2009.”
Variety used to make 30 to 40 percent profit after taxes, according to former executives. Stiles declined to say how profitable the trade currently is.
Another six editorial staffers were let go in addition to Speier and Hayes, and seven others elsewhere in the company. In January, Variety laid off 30 staffers from editorial, sales and corporate departments, including such heavyweights as marketing chief Madelyn Hammond and top reporter Anne Thompson, leaving an estimated 100 on the staff at that time.
The trade’s main competitor, the Hollywood Reporter, has also been struggling and laid off 12 staffers in July and another 12 in December.
The big question for Variety, of course, is whether, aside from cutting off heads – notably, heads at the top -- they have a plan for moving forward.
