Martha Stewart Living to Lay Off Staff and Reduce Magazines

Fernando Leon/Getty Images Martha Stewart

Dragged down by advertising and circulation declines, Martha Stewart Living Omnimedia is cutting back the publication of two of its magazines and laying off about 70 employees, approximately 12 percent of the nearly 600-person company.

The company started to notify staff about the layoffs on Thursday afternoon, ahead of its Friday morning quarterly earnings call, which had been rescheduled because of Hurricane Sandy.

The company will cut back the publishing schedule of the magazine Everyday Food from 10 times a year to 5, and deliver the magazine as a supplement to subscribers of Martha Stewart Living, according to the company; it will no longer be sold as a standalone publication.

According to the Audit Bureau of Circulations, Everyday Food has a 1.09 million circulation, and, according to the Publishers Information Bureau, had a 14 percent decline in advertising pages in the past year. The plan is to expand its digital presence.

Martha Stewart executives also are putting Whole Living on the market. The magazine, with a circulation of 760,606, has suffered a 24 percent decline in advertising pages in the past year. While company executives say they already are in discussions to sell the magazine, they plan to stop printing by the year's end and fold its content into Martha Stewart Living.

Lisa Gersh, the company's president and chief executive officer, described the moves as, “we're taking it really from four separate magazines down to two.” She added the decision was driven by declines in magazine advertising and newsstand sales and the potential for greater profits in video. The company's magazine titles also have attracted more digital subscribers than their competitors.

“In light of the clear trends we are seeing across the media industry, and following a careful evaluation of our own publishing segment, we are taking decisive action to drive the company's return to sustainable profitability,” Ms. Gersh said.

Employees at Martha Stewart Living have not been able to return to work this week because Hurricane Sandy flooded the basement of their downtown offices. As a result, many of them learned of layoffs by phone and e-mail. In a release, company executives estimated that the steps would save $33 million to $35 million a year on staff, circulation and distribution.

Earlier this year, the company cut $12.5 million in broadcasting costs by not renewing its programming deal with the Hallmark Channel, breaking its lease on its television production studio and ending its live audience for “The Martha Stewart Show.†

Ms. Gersh said that in the current magazine industry it was easier for large-scale publishers “with multiple magazines, with numerous magazines” to survive and that “scale in this marketplace counts.” She added it made more sense to focus on video and related merchandise.

“We're really dealing with an industry climate issue,” said Ms. Gersh about the challenges with publishing magazines. “Everyone needs to look at their cost structure in this industry to make sure that they're operating efficiently because it's not the same industry it was.”