Attractive exit packages, looming layoffs, “fear of the unknown,” staffers say
Next week, the sale of Newsweek to Sidney Harman will be finalized, giving the 91-year-old audio equipment magnate control of the struggling newsweekly.
And the magazine’s masthead will look quite a bit different than the one he agreed to buy more than a month ago — and quite a bit thinner. On Sunday, Howard Fineman, Newsweek’s senior Washington correspondent, became the latest editorial staffer to jump ship — taking a job as senior political editor for the Huffington Post after 30 years with the magazine.
Since the sale was announced last month, editor-in-chief Jon Meacham, international editor Fareed Zakaria, editor-at-large Evan Smith, editorial director Mark Miller, diplomatic correspondent Lally Weymouth, national economic correspondent and senior editor Michael Hirsch, economics editor Daniel Gross, investigative reporter Mark Hosenball, Newsweek.com general manager Geoff Reiss and executive editor Gabriel Snyder have left or announced plans to leave.
So, what exactly is behind the exodus?
According to interviews with three Newsweek staffers — two current, one former — it’s a combination of factors: attractive exit packages that may or may not be available when the sale officially goes through; looming layoffs that, while not as massive as some had predicted, could affect up to 25 percent of the current staff; and, perhaps more than anything else, an overwhelming “fear of the unknown.”
The announcement of those layoffs are expected Friday. On September 8, Harman announced that all employees would receive a letter on September 24 indicating whether or not they’d be given an employment offer under the new ownership. According to one employee, Harman said at least 75 percent of the staff would receive an offer.
A spokesperson for Newsweek declined to comment and said the company does not disclose headcount numbers. (On March 31, Newsweek’s headcount was 379; it’s closer to 300 now, and the Times reported in August that Harman would would retain about 250 employees.)
The sale of Newsweek — which Harman reportedly paid one dollar for, plus the assumption of its heavy debt and circulation liabilities — is expected to be finalized on September 30.
But Harman, it appears, has not told most employees whether or not their jobs would be there on October 1, leading many to seek employment offers elsewhere. There appears to be a lack of communication between the new owner and remaining employees, sources inside Newsweek say.
A spokeperson for Harman did not immediately return a request for comment.
“It’s indicative of a vacuum,” one Newsweek staffer said of the apparent exodus. “No one is telling you to leave, but no one is urging people to stay on.” Harman, this staffer added, has met with few individually — and most of those were senior management.
Of course, it’s not unusual to see significant staff turnover when a new editor is brought in to a publication. What is unusual is to see a steady exodus before the new editor is named. (Newsweek's acting editors, Danny Klaidman and Nisid Hajari, are not expected to continue once the new one is found, sources inside the magazine said.)
But that appears to be part of Newsweek's current retention problem, too — another "unknown" to add to a growing list at the title.
“It’s really a fear of the unknown,” said another staffer. “We don’t know what the budgets are going to look like, or what our roles are going to be, or even what Harman's role will be day-to-day. It’s a ‘world of unknowns’ versus the ‘world of knowns.’ At National Journal or Huffington Post, there are more ‘knowns,’ or, at least, more definition of what the goals are.”
And there’s the factor of competitors, such as Time magazine, looking to pick off talent. It seems that when the Washington Post put Newsweek on the block in May, they inadvertently put people on the block, too, making known their editorial talent was also on the market.
“These aren’t lifeboats,” one staffer noted of the jobs exiting Newsweekers are landing. “These are good opportunities.”
One thing that does not appear to be a factor in the current exodus is that Tina Brown rumor, these sources say. “Sure, there might be some anxiety among ‘old-school’ staffers about the editorial voice moving forward,” another staffer said. “But overall most people aren’t overly concerned about that.”
And slumping finances, beyond the layoffs, are apparently not a factor, either, according to the sources.
Newsweek lost more than $20 million in 2009, and is expected to approach or even exceed that figure this year.
[Newsweek building photo via Mark Coatney; album cover photo illustration via TheWrap]