Why staffers at Condé Nast have good reason to worry

People are magazines' most important asset and their most expensive element, which is why there has been significant nervousness in the hallways of Condé Nast (Vogue, New Yorker, W, GQ, Self, Glamour, Brides, Gourmet, Wired, Vanity Fair etc. etc.) The company, which publishes among the most prestigious magazines around, last summer brought in the consultants, McKinsey and Company, to nose around and look for savings opportunities that will more or less match the recession-induced slide in advertising revenue.

Well, McKinsey has delivered its report, senior management has been briefed and, whether it is a leak or inadvertent, it has become common chit-chat in New York that the company is looking for cost savings of 25% across the board. Which means cutting jobs out as part of next year's budgeting.

According to a story in Crain's New York Business, the cuts are likely to be deeper and more painful than any so far; last fall, editors and publishers were asked to cut budgets by 5%. Advertising revenue has fallen at every one of Conde Nast's 21 titles.

It's not clear how much editors and publishers will have to cut from their respective staffs and budgets, but one senior executive speculated that they could be asked to reduce spending by as much as 25%. The McKinsey findings may be tapped for ways to achieve the reductions.

The assumption behind the cuts is that advertising is not going to rebound any time soon.

“They're not going to expect you to grow your way out of these [difficulties],” the executive said, referring to the feeling in the past among senior Condé Nast management that the ad recession would be short-lived. “You're going to have to make your business work the way things are now.”