Dusseldorf For decades, Gruner + Jahr (G+J) was one of the most powerful media houses in Europe. Now there is a staff cut at Hamburger Verlagshaus: owner Bertelsmann plans to cut a total of 700 of the 1900 jobs. Bertelsmann and RTL boss Thomas Rabe announced this to the employees on Tuesday morning at a works meeting in Hamburg’s Baumwall. “It’s a hammer, a shock,” said the workforce.
The two Bertelsmann subsidiaries RTL in Cologne and G+J in Hamburg were merged at the beginning of the year. Europe’s second largest media group was hoping for synergies. With the help of the McKinsey consultancy, the group’s top managers recently put the Hamburger’s magazine titles to the test.
It is now clear: 13 core brands such as “Stern”, “Geo”, “Capital” or “Gala” will remain in the portfolio. They make up about 70 percent of the turnover of 350 million euros. Rabe wants to discontinue 23 titles, mainly offshoots of the big names. These include “Geo Knowledge”, “Brigitte Woman”, but also “Barbara” by TV presenter Barbara Schöneberger.
RTL is also cutting jobs at the Cologne headquarters
“We have decided to focus on the core brands,” said Rabe on Tuesday. Rabe is considering a sale for five brands, including “Beef!” and “Salon”. The RTL stake in the sports magazine “11 Freunde” is also for sale.
There had already been expressions of interest from other publishers. Rabe said: “We will take our time to explore the market over the next few weeks and see who is really interested in which title and in what order of time we will release the titles.”
There will also be job cuts at RTL headquarters, the group admitted at noon. 300 jobs in Cologne are to be cut by 2025. RTL has a total of 4,000 full-time jobs there. This is necessary in order to secure the earning power of RTL Germany in the long term despite massive investments, it said.
“From today’s perspective, we are confident that we can achieve this reduction through measures such as fluctuation, individual approaches, early retirement and partial retirement,” said a spokesman. At G+J, redundancies are unavoidable.
Gruner + Jahr threatened to slip into the red
Like the entire media industry, RTL is suffering from falling revenues and, due to the current crises, from the reluctance of companies to advertise. Added to this are rising costs for paper and logistics.
According to Rabe, RTL’s publication business is in danger of slipping into the red. In the past year, Gruner + Jahr’s profit was still one million euros. This year, earnings before interest, taxes, depreciation and amortization (EBITA) would be “negative in double digits without measures,” according to Rabe.
RTL is considering a sale for the five brands “Business Punk”, “Art”, “PM”, “Beef!” and “Salon”.
(Photo: dpa)
The manager is seen as a cool numbers man who takes things into his own hands. Since mid-August he has not only been head of Bertelsmann, but also of the RTL Group and RTL Germany. Critics accuse him of making many decisions too independently. The former RTL boss Stephan Schäfer had to leave after just one year because he was probably considered too lax for the task.
Rabe’s plans will result in 500 jobs being cut at the Hamburg site – “gradually by the end of 2025”. 200 more jobs are to be transferred to the new owners through the planned sale of the title.
The majority of jobs should not be eliminated in the editorial offices, but rather in IT, in the human resources and legal departments, in facility management, in communications or in marketing.
Rabe wants to invest 80 million euros
Rabe’s strategy is to create “national media champions,” as he likes to say. He wants to take action against the supremacy of Google, Netflix and Co. on the advertising and media market. Rabe had emphasized that for the planned investments in the important streaming business, resources would have to be redistributed and structures questioned.
Rabe plans to invest a total of around 80 million euros in the remaining titles at G+J by 2025, as he announced. The money should flow primarily into the digital expansion of the core brands. “We see significant synergy effects between the core brands of Gruner + Jahr and RTL – not only in the editorial cooperation, but above all in marketing,” says Rabe. He sees an added value of 75 million euros per year.
Difficult phase for the Bertelsmann boss.
(Photo: Bertelsmann)
Rabe wants to invest 30 of the 80 million euros in the digital offer of the magazine Stern, “Stern plus”. This announcement reveals that another RTL project is not working as planned. RTL actually wanted to launch its moving image content, music and digital magazines from G+J in an app called “RTL plus”.
The company has not yet been able to implement this idea due to technical difficulties. It is now questionable whether everything will be bundled in one app or whether digital offers will be spread over several apps or different channels.
Hamburg as a magazine location is to be retained
Another 30 million euros flow into other core brands, 20 million into new premises. The Hamburg magazine location is to be retained. However, the editorial team will have to leave their traditional offices on Baumwall with a view of the harbour. By 2024, the employees are to move into new rooms. However, non-editorial functions are bundled in Cologne.
For manager Rabe it is a difficult time as Bertelsmann boss. There have been many rumors in recent weeks that core brands such as “Stern” or “Geo” should also be discontinued. Apparently, however, the pressure was too great: there had been strong protests from employees and unions against a possible sale.
Rabe’s acquisition plans are also not working out. In the past few months, four transactions with a total value of five billion euros have failed. In France and the Netherlands, Rabe wanted to create strong media brands through mergers. However, this failed due to resistance from the antitrust authorities. In addition, takeover plans in the book and call center sectors went awry. “He has no run,” says the workforce.
Meanwhile, Bertelsmann wants to keep its shares in the magazine “Spiegel” and the DDV media group, to which the “Sächsische Zeitung” belongs. This also applies to the Applike app platform, which used to belong to G+J. Shortly before the merger, the media group assigned these offers to its Bertelsmann Investments division.
More: Fourth defeat in a row – Bertelsmann fails with mergers worth five billion euros