Off to a Bumpy Start

It’s been a week since W magazine was sold, and already there may be a bit of discord brewing.

Sources tell WWD an issue over pay is bubbling up between some W employees set adrift and Surface Media, which last week closed a deal to acquire W and formed Future Media Group. Although a small handful of employees, including W’s digital director and p.r. director, decided not to sign on with Surface/ Future of their own accord, another small group — thought to be under 10 and working in digital and print — were terminated by Condé Nast and not hired by Surface/Future. But many were needed to keep the site running and print production for Issue 4 on schedule, so were asked to work last week, assuming they would be compensated or receive some type of severance. But they are said to have received no severance from Condé and gone unpaid for most of last week. Sources say their inquiries to Surface have been met with that company putting responsibility for pay on Condé.

Someone close to Condé’s operations, who requested anonymity, denied that this was the case while Surface chief executive officer Marc Lotenberg said he was “not aware” of anyone working and going unpaid. Speaking from an event in Europe, Lotenberg said “less than a handful” of W staff either did not sign on or were not offered roles and that “anyone who worked either has been or will be paid.”

Stefano Tonchi, W’s former editor in chief, is also claiming his own pay issues. He last week sued Condé’s corporate parent Advance Publications for just over $1 million, claiming he was wrongfully denied severance pay and classified by Condé executives as being terminated with “cause,” leaving the company to claim his employment agreement was null. As reported by WWD, Tonchi became less enamored with a sale to Surface/Future after learning some past details of Lotenberg’s business dealings and the reputations of Surface’s operations and its current backers for the W purchase.

As for those who signed on to work for Surface/Future, while some are looking forward to a new day for the publication under new editor in chief Sara Moonves, there’s also some concern about what they may have gotten into.

In a morning meeting the day of the sale announcement, W staffers were summoned in an e-mail by Anna Wintour, editor in chief of Vogue and Condé’s artistic director, and told that they had 24 hours to sign on with the new company and failure to do so would be considered a resignation from Condé, meaning the company had no responsibility toward them. Nevertheless, so many people held out, allegedly including executive director Armand Limnander, that the signing deadline was extended until end of day on June 27. Now Lotenberg says roughly 37 W employees have signed on, including Limnander, editor at large Lynn Hirschberg and features director Diane Solway. Lotenberg also noted that some freelancers or part-timers were offered full-time positions and accepted.

But even with signatures, there’s some concern over the language of the Surface/Future employment contracts. Not only do they include clear language that everyone is entering into a three-month “introductory period” that includes no access to benefits for those coming from part-time or freelance status, or paid time off, but that employment after the three-month period depends on a “satisfactory evaluation” of their work. This, along with Lotenberg’s plans to have all employees work across W, Watch Journal and Surface, has unsurprisingly given rise to chatter that there will be a round of layoffs in a few months’ time.

But Lotenberg insisted there are no plans to reduce the staff.

“We’re thinking about adding to the business and building new revenue streams. We’re investing,” he told WWD. “It’s not about how to cut our way to greatness, it’s about building up around all the amazing talent that’s at W.”

Still, the contracts also purportedly include a nondisclosure agreement, setting some staffers on edge. Beyond that, the contracts list 11 “House Rules” for working at Surface/ Future that start with basic guidelines for informative magazine writing but quickly turn more prescriptive, with number three being, “The magazine is a commercial product; revenue comes first.” Number four: “The creative process is collaborative; management decisions are not.” Number five: “This is a drama-free office. Do not cause a scene or complain openly in the workspace.” Number six: “Get your job done without being told.” Some things that employees have been told: work starts at 9 a.m. and “Summer Fridays,” a longstanding tradition at Condé, are a thing of the past. — KALI HAYS