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September 1-15, 2005 Edition
Timer Warner Hopes
Hiring Freeze Will Bolster
Current Year ProfitsNew York, NY/08/27/05Time Warner Inc. has initiated a hiring freeze and capped spending for travel and customer gifts for its magazine division. The move is an effort to bolster profit goals, by reducing expenses by 20 to 30 %.
Time Warner Chief Executive Richard Parsons, 57, is pressed to deliver returns to shareholders in the face of a 9.8 % decline in stock values this year. The companys first-half profit fell from a year ago, partly due to lower advertising sales at Time, Sports Illustrated and Fortune. The unit also reported a 3% decline in profit, after predicting a 6% gain.
The parent company, which includes Time Warner Book Group, also owns cable-television systems, cable networks such as CNN, the Warner Bros. movie studio and America Online.
Acting Chief Financial Officer Howard Rosen said in a employee memo that every division of the company has been asked to cut costs for the rest of the year in order to combat what Rosen termed a challenging year..
Cuts in expenses include a ban on giving theatre tickets to clients without approval. The cuts also require employees to take the subway or taxis rather than car services, and expect them to travel by economy air fare rather than first class.
Time Warner, Inc. publishes 155 magazines worldwide. The Time Warner Book Group placed a record 58 titles from its Warner Books, Little, Brown and Company, and Warner Faith imprints on the New York Times Best Seller list in 2004.