CDS Global fulfillment service lays off 270 staff, closes one facility in U.S.

CDS Global, a division of Hearst Corporation and a major North American provider of magazine subscription fulfillment services, is laying off approximately 270 of its 3,000-member workforce  in Iowa, effective the end of May and is closing one of its facilities in Red Oak, Iowa.

CDS Global CEO Malcolm Netburn told Audience Development that the company has seen a steady decline in the total number of subscriptions served, either from shuttered titles or rate base reductions. The cuts come during a period of dramatic cost containment for magazine publishers. This has trickled down to suppliers. “It’s complicated and difficult to do what we did. But simple for the reasoning.”

There were 44 CDS-serviced titles that shut down last year, he said. At the same time, consumers are increasingly using the Web to order their subscriptions, putting a strain on physical mail processing—a service the Red Oak facility was primarily used for. “We do [mail processing] in six locations. It was strictly a matter of looking at capacity,” says Netburn. He said elsewhere that his company has to change with the times."The people who lost their jobs did not lose them because they weren't great employees," he said. "They lost them because the nature of the businesses we're serving are changing."

Eileen White, spokeswoman for CDS, said “there’s been a major transition in the markets that we work with from paper transactions to digital,” she said. “You can get a lot more done in the digital world with a lot fewer people.”

CDS provides order management, data capture, lockbox and payment processing, and printing and mail management, as well as warehouse, distribution, and fulfillment in the U.S., Canada, Great Britain and Australia.

It's not known what impact the layoffs will have in Canada, where CDS is by far the largest fulfillment provider, with offices in Markham, Ontario and Montreal, Quebec.  One Canadian publisher said that the retrenching by such a major player as CDS Global doesn't bode well for mail-based systems for magazine subscriptions.