It's never nice to find out you might be getting laid off. But to learn about it by reading it in the paper -- that's tough.
Yet that's exactly what happened at BusinessWeek this week. Employees there have been braced for bad news since June, when McGraw-Hill unveiled plans to "explore strategic options for" -- i.e., sell -- the 80-year-old title. But talk of downsizing was merely speculative until yesterday, when The New York Times reported that BusinessWeek had "announced its fourth round of layoffs in two years" back in January.
In fact, BW had announced no such thing -- but it had quietly drawn up a proposal to shrink the magazine's workforce by 20 percent, including a 25 percent reduction in editorial headcount. Those were the figures cited in a memorandum that Evercore Partners, the investment firm handling the sale for McGraw-Hill, circulated to prospective buyers.
According to two BusinessWeek sources, the downsizing plan was conceived at the highest level of the magazine, without the knowledge of anyone below that stratum -- all of whom learned about it from the Times. Not that it came as such a shock. "Everybody here knows the industry's in a tough environment," says one source. "I don't think anything like that would be a big surprise."
To be clear, the plan outlined in the memo is merely a hypothetical blueprint meant to give potential bidders an eye of the kind of cost savings they can hope to achieve. The eventual buyer could decide to cut more deeply, less deeply, or not at all -- although the probability of that is vanishingly small.
BW's own Stephen Baker has predicted that, of the known interested parties, financier Bruce Wasserstein, who owns New York magazine, would be likely to leave the staff most intact, while financial news giant Bloomberg LP, which already has hundreds of journalists on its payroll, would be able to find the most redundancies to eliminate. Unfortunately for BW staffers, Wasserstein is now said to be out of the running -- leaving Bloomberg as the favorite to win the bidding.
What are stocks? Learn how to start investing.View Course »