After months of speculation, the recommendations from the McKinsey consultants are in and cutbacks are likely to be sweeping at publishing giant Conde Nast, where car service and free lunches have become routine affairs.
Despite the fact that the magazines at Conde Nast have suffered as much as its counterparts (despite increasing subscriptions, advertising losses have been steep and newsstand sales have brought in $2 million less in the first half of 2009 than they did in 2008), the publishing company has -- for the most part -- retained its culture of relatively lavish spending. While Conde has, in fact, closed two publications this year (Domino and Conde Nast Portfolio), and rumors have swirled that future closings may be in the works, editors have continued to lead the relatively luxurious life they advertise in each publication's glossy pages, and layoffs have been minimal.
An article in The New York Times yesterday, however, outlines how much of that is likely to change in the coming weeks, as the McKinsey consultants have recommended as much as 25 percent budget cuts at some of the major magazines. As Audrey Siegel, executive vice president and director of client services at TargetCast tcmtold the Times, the company has been "shielded" thus far, "but I think Conde Nast will feel it now."
According to the Times, executives at Conde Nast have been told that their planned budgets for next year must assume that 2010 will remain flat (a tough pill to swallow), and editors and publishers will determine magazine-to-magazine how the reductions will work. It's likely that most magazines will look at their contributor fees and move more writing in-house (the exeption, apparently, being The New Yorker, whose editorial arm is reportedly exempt from cutbacks).
It's the lifestyle shift, however, that will likely be the hardest, since this is a company where glamorous hotels, top-name photographers, and and over-the-top expense accounts are just part of the perks of employment. This has all served Conde Nast well in its quest to sell luxury to the masses -- and frankly, it will be a devastating blow to the fate of glossies overall if the quality at Conde Nast -- one of the last bastions of glamorous old media -- should be forced to suffer.