Tuesday, October 02, 2007

Things get really ugly, really fast at Cygnus

On Sunday, I posted something to this blog about the troubles at Cygnus. I suggested that upper management's decision to cut wages would lead to morale problems, and warned that the plan to cut salaries "isn't going to end well."

It now appears that I underestimated just how angry folks were.

In the past few days I have rejected 12 comments to this blog because they violate the one rule I have about comments -- no anonymous personal attacks (There is one exception -- I generally allow anonymous personal attacks on me.)
That's a record. Nothing I've ever written has generated such nastiness. The folks at Cygnus are livid. And I don't think it is an exaggeration to say that the staff hates the company.

To those of you who wish to vent your anger on this blog, I ask that you please resend your comments. Feel free to do so anonymously. I understand that many of you fear for your jobs. But if you wish to be anonymous, do not mention bosses, co-workers, administrative staff or others by name or by identifying title. I'm sure that those of you in editorial understand my hesitation to publish anonymous personal attacks and curse words. I'm sure you have similar rules at your publications.
Also, some of you have shared personal anecdotes about the management of Cygnus. These stories, if true, are illustrative of what has gone wrong at the company. But I'm not willing to publish those accusations anonymously. Nor do I have the time and resources to "launch an investigation" of the people in charge. Instead, I would urge you to contact the reporting staff at Folio magazine. Perhaps they would be interested in chasing this story.
Thanks. And good luck in these next few difficult weeks.

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  1. What really is the future of Cygnus?

  2. Anonymous,
    You ask a question that I cannot answer. But I will tell you what I fear will happen.
    People that follow B2B publishing closely have seen numerous instances of companies that find themselves owned by private equity firms and saddled with extraordinary amounts of debt. The assumption seems to be that somehow or another new management can extract enough growth to cover costs, pay down the debt and pay off the investors.
    But at Primedia, Ziff Davis, etc. we've seen that idea fail. When the company can't make the debt payments and meet bank obligations because revenue doesn't grow fast enough, they have to cut costs in order to make payments. Then they turn to the same staff that has absorbed those cuts and urge them to make those same growth targets. But if someone can't/won't produce growth at a decent salary, why in the world would they do so for less money?
    The biggest barrier to growth at a publishing company is bad morale. And layoffs and salary cuts and hiring freezes hurt morale.
    Surely a good portion of Cygnus' staff spent this weekend looking for new jobs. And surely some of them will find them. They will likely be the lucky ones.
    I don't know how this will end, but I don't expect it to end well. And nothing is certain other than that workers at Cygnus face a difficult and unpleasant environment in which to work.

  3. Then they turn to the same staff that has absorbed those cuts and urge them to make those same growth targets. But if someone can't/won't produce growth at a decent salary, why in the world would they do so for less money?

    As a former Cygnus employee - I can say with certainty that this has been going on for years - management was asked to made budget cuts so the company could "make the bank payment" at the end of the year. At the same time, we were asked to increase our revenue targets - hard to do when there are three months left in the fiscal. Business reviews - held in September - were complete jokes; cut this and that and add more revenue to the bottom line. Not possible. Even with annual July (and January) layoffs of staff. Oh yeah - and that "company closed" deal during the holidays. Most of the time they didn't even both to pay us. And no, you can't file for unemployment if the company is closed for a week and they don't pay you. That is not considered a layoff. It's been sad to see many of the talented people leave the company - those with a lot of experience and high moral standards. Those who have stayed (in senior management) are those who are comfortable saying yes to everything the executive management requests while cracking the whip on junior staff to get the job(s) done - many of these 'kids' are doing the work of 3 - 4 people and collecting a salary that can't afford a 7.5% decrease for 3 months.

  4. What get's me is what's left out of all of this: Yes, print accounts for 70% of revenue, but it gets about 10% of the support it needs. Travel cuts, doubling work up on employees instead of replacing people that leave, letting go of competent and qualified staff whilst retaining the clearly underqualified; how are they expected to make money with absolutely zero support?

  5. Hi, Paul,

    I'm one of the people who posted a response that was apparently rejected, and it's a shame because it was a good one. But I understand why, now that you've explained it in your blog, and will attempt to reform my thoughts more along the guidelines you requested. :)

    As you surmise, the Cygnus staff is NOT happy with the company--and I'm engaging in severe understatemet when I say that. More accurate would be your wording--that many of us HATE the company. And that is not hyperbole. Things had already gotten out of control in the past few years, but now they're completely intolerable. The staff has faced budget cut upon budget cut, layoff upon layoff, doubled workload upon doubled workload, to the point where the morale is at an all-time low and many employees just don't care anymore. Why should we? Where’s the motivation, if the company doesn’t appreciate or even acknowledge any of it?

    Self-pride only goes so far—it certainly doesn’t pay the bills—and what was once a proud company filled with people who took pride in our work and often put in late hours is now a bastion of misery where people show up with frowns on our faces, counting the seconds until we can get the heck out of there again, precisely at closing time. If it was nearly impossible to get all our work done well in 40 hours (and it was), then how likely will it be to do so in 37? And make no mistake about it—if the company is saying it won’t pay us beyond 37 hours, then that is how many we shall work.

    It wasn't always like this...Cygnus used to have a number of magazines known for their high quality. Now, even those once-great titles are mere shadows of what they once were, thanks to the vastly reduced sales staff, non-existent editorial and travel budgets, and other extreme measures. Add in the fact that most of the experienced veterans have been laid off, replaced by younger, inexperienced (read: cheaper) workers, and it becomes impossible to maintain any semblance of quality. People work extremely hard at Cygnus, staying late and making a consistent effort to put out good work despite the counter-intuitive decisions of the management. But it makes no difference, because even when we try to make job pride our number-one priority, the company still treats us like number two.

    People at Cygnus are grossly underpaid and underappreciated, and estimates I've seen in some blogs of what the average Cygnus employee makes are WAY above actual salary levels. The upper management takes every opportunity to tell us when something has gone wrong and to create new rules that seem designed to crush morale, while rarely ever acknowledging all the hard work that gets done despite this. The recent salary cuts are just the latest insults heaped on us by the management. Cygnus closed for weeks at a time during the Christmas season without pay several years in a row, for instance. And sure enough, the new cuts come mere months before Christmas. How's THAT for a Christmas bonus?

    Meanwhile, a lot of good people have lost their jobs in the past several years, particularly the last batch a couple of months ago. Expect to see a mass exodus in the coming months as well, but this time on the employees’ terms, as a LOT of us are actively looking elsewhere. Unless the company reverses its decision to cut our pay, and unless it starts to show that it values our hard work and dedication and talent, then it will definitely need to start looking for new employees soon.

  6. Seems to me the people who are most responsible for the lack of dollars coming into the company are the least affected by this pay-cut: The sales staff. Nothing against the many hard-working sales employees working for Cygnus; however taking 7.5% out of a base salary of $20,000, while leaving the bulk of the income (AKA commission) untouched is a bit unfair to those who have nothing to do directly with the bottom line getting their whole paycheck hit.
    It was repeatedly stressed with the arrival of the new regime that the employees are the company's #1 asset. Nowadays it seems they're nothing more than an expendable resource.

  7. The previous comment on whom to blame, sales. Hate to say it but you really don't know what you are talking about in terms of how sales people are paid at Cygnus. Their commission structure is less than 6% of their total salary so no, they don't drag in the "big checks".

    Sales hands were tied at the beginning of the year with a ridiculous interactive ad program that was supposed to generate over $1 mil. It shifted focus away from their core business of print and collectively as a group, lost momentum and sales opportunity once the mucky-mucks of intereactive realized it was a losing battle of revenue gains.

  8. Based on the description of Paul Conley, it sounds like they need YOU!

  9. I'd like to mention the fact that NO ONE (and I do mean no one) in upper management has apologized or even brought up the salary cut. There are mandatory, bi-weekly conference calls (rah rah ree meetings) and 2 town hall meetings this week and still no mention of the salary cuts. To make it even worse, the "internal memo" posted on Folio's website was hardly internal. To my knowledge it never went out (if it did go out it went only to Brand Directors). The salary cut news was merely sent down the chain of command by word of mouth. More than anything, the avoidance of the issue infuriates me.

  10. I've listen to the "we have to have a good relationship with our bankers" speech from our 2CEO's and I'm puzzled...

    Where does spending $30,000 on a party in Las Vegas fit in the “good relationship with our bankers” discussion?

    We have all been asked to make a sacrifice to ensure we are able to make the payments necessary to keep the bankers happy, yet PTEN is allowed to spend thousands on a party scheduled next week…are we all invited considering we all sacrificed? Let me guess…it’s so important that senior management will pay the tab…doubt it.