Layoffs expected as McKinsey helps publishers Time cut costs

30 June 2017

According to reports from the US, American magazine group Time has hired strategic advisory McKinsey & Company as the conglomerate bids to cut over $100 million in costs this year.

Time, the American mass media company behind over 100 global magazine brands including Sports Illustrated, People, and its standard-bearing Time Magazine, has reportedly brought in advisors from professional services firm McKinsey & Company.

Time has faced increasing hardship since its divorce from Time Warner three years ago. The company was purchased by Warner Communications in 1989, in a merger that formed the Time Warner group, before regaining independence midway through 2014, with Warner jettisoning the magazine magnate to focus more on its core business. The process left Time loaded with around $1.3 billion in debt, following almost a decade of declining revenues, which had seen unit earnings fall from nearly $1 billion in 2006, to $370 million in 2014.

According to Thomson Reuters, the company’s printed advertising revenue, which makes up over two-thirds of the publishing giant’s total ad sales, tumbled a catastrophic 10.2% in the fourth quarter of 2016 meanwhile. Despite digital advertising revenue rising by around 63% in the meantime, Time’s total revenue subsequently fell to $867 million from $877 million, failing to meet their average analyst estimate of $872.7 million. As the group’s income continues to tumble then, it has since been revealed that the besieged magazine group have begun procedure to find over $100 million in cost cutting over the following year.

Layoffs expected as McKinsey helps publishers Time cut costs

The falling revenues at the company had led to various offers for a buyout of the publisher, however Time CEO Rich Battista, rebuffed the efforts earlier in 2017, breaching the no-sale message in late April. Battista instead announced the company would be aggressive in cost controls, while focusing on an ongoing strategy would include an increased digital push as their traditional readership moves from print to web-traffic, alongside “portfolio rationalisation.” This prompted further speculation of the sale of Time assets, with layoffs a likely result of the oncoming auction.

Conjecture surrounding the expected fire-sale is meanwhile growing, with rumours that Time is already looking to offload four magazines, Coastal Living and Sunset – as a unit – as well as Health and Golf. Accompanying a projected sale of the group’s British wing, IPC, which runs 64 magazines meanwhile, inside sources suggested that Time’s London wing to have already absorbed about 100 of the 300 people who are being cut as part of the global downsizing project.

According to allegations emerging from sources in the group, the company plans to soon offer a voluntary round of redundancies to employees with 10 or more years’ experience. Depending on how many accept that option, Time would then revert to non-voluntary layoffs.

McKinsey, one of the world’s largest management consulting players, has recently made substantial efforts to boost its digital advisory capacity on a global basis, while the firm is already noted for its regular role in the restructuring of companies. With various sources stating publicly that Time is seeking to “reengineer” the way it does business, McKinsey’s alleged involvement perhaps comes as little surprise then, despite Time having not officially acknowledged the company’s hire.

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How data insights helped Network Rail improve the South-East route

11 April 2019

Amey Consulting has leveraged data insights to assist Network Rail with the improvement of its South-Eastern route. Using the Quartz tool, which monitors train movement, Network Rail will now be able to commit to data-enabled interventions to quickly improve underperforming train stations.

With rail services in the UK coming under strain from the demands of modern commuter life, while the infrastructure and service delivery of the nation’s railways has come in for sustained criticism in recent years, a period of regeneration is on the cards at last. Network Rail is the owner and infrastructure manager of most of the railway network in Great Britain, and has subsequently tapped the consulting industry on a regular basis to help find areas of improvement.

The group recently drafted in consultancy BearingPoint to conduct a thorough organisational evaluation and advise Network Rail (High Speed) on attaining a ‘fit for purpose’ organisational standard – for which the consultancy was nominated at the 2019 MCA Awards. Meanwhile, ArupArcadis and Aecom have been contracted to help Colas Rail and Babcock Rail implement a decade-long framework for Network Rail, aimed at supporting the delivery of the next generation of rail systems, with the contracts said to be worth as much as £5 billion

How data insights helped Network Rail improve the South-East route

As Network Rail further aims to improve its performance and customer service offering, another area it has sought help from the consulting sector for is its South-East route. The network of railways connects London with the southern parts of the country, as well as with Europe, making it the busiest in the country, with more than 500 million passenger journeys per year. This crucial expanse of rail was plagued with small minute delays, which were impacting millions of passengers every day, while reducing the efficiency and capacity of the overall network – something Amey Consulting was selected to help solve.

Amey Consulting soon determined that with the sub-threshold delays to services only lasting for 1 or 2 minutes, most were not the subject of detailed root cause analysis, and this made their corrections almost impossible – with dire consequences. Without addressing these delays, passenger satisfaction would fall, while the capacity and efficiency of the network would be reduced, stinging the income of Network Rail even before a host of delay-related fines would hit the company.

In order to help the client gain a better understanding of where, how, when and what these small delays occur, Amey Consulting looked to demonstrate the value of data-led consulting, with a significant reduction in delays within the first month of rolling out changes to key stations. The consultants embedded themselves in Network Rail’s team, helping them learn the key skills needed to support and apply data-driven solutions.

Agile transport

This involved the deployment of the Quartz tool. The system utilises to-the-second train movement data to present the performance of individual stations across the South-East route. It allows users to effortlessly understand station performance with a high level of detail, and use this information to identify losses caused by small-minute delays. The granular data allows for targeted actions to drive efficiency savings and performance improvements. More importantly, it allows users to understand the impact of small process changes on performance. 

Steve Dyke, an Executive Partner at Amey Consulting, said of the project, “We looked to identify the physical root cause on the infrastructure, building a case for change then managing that project implementation and tracking the benefit/value.  In doing so we are working to define a data performance improvement service to the operational and infrastructure owners.”

Just as important for the project as the technology, however, was teaching the Network Rail team how to leverage it after the consultants were gone. The Amey Consulting team worked to develop an agile working culture within Network Rail’s South-East division, helping staff to be confident in using data to improve the journeys of millions of people per year by attacking the problem from the ground up.

Dyke concluded, “This is less about the tools and about the approach to managing performance.  It meant using by-the-second analysis, data science, and then agile development to visualise and identify areas where improvements can be made.  We then worked with NR to change the way they approached the management of the infrastructure changes.  So rather than pass the information down the value chain, any of which could have been missed, we managed the change end-to-end.”

The project was so successful that Amey Consulting was also among those honoured at the recent MCA Awards. The firm scooped the Performance Improvement in the Public Sector prize for its work with Network Rail, at the 2019 ceremony in London.