PCH Lays Off 213 Employees
"Because of the prolonged attacks on direct mail sweepstakes, we are experiencing lower sales. Although we are pleased to have obtained preliminary approval for a nationwide class-action settlement and expect to reach a settlement in the near future ... the anticipated cost will be large," chairwoman/CEO Robin Smith said in a statement. Smith did not return calls seeking further comment.
Two-thirds of the personnel who were let go were based in PCH's headquarters, where its marketing, information services, creative and finance departments are housed. The rest were at its customer service and document-processing center in Syosset, NY. Scheduled sweepstakes giveaways won't be affected, the company said, and one prize will increase from $10 million to $21 million next year to commemorate the 21st century.
The cutbacks won't affect PCH's plans to relaunch its Web site next week. According to PCH spokesman Christopher Irving, consumers will be able to sign up to enter the January sweepstakes online. There also will be a variety of real-time sweepstakes for online visitors next year. Smaller merchandise giveaways of CDs and videos also will take place on the site.
When told of the layoffs, Christopher Little, president of Meredith Publishing Group, Des Moines, IA, said he didn't expect his relationship with PCH to change. Meredith uses the company and other sweepstakes marketers to sell its main titles Ladies Home Journal and Better Homes and Gardens. Over the last several years, however, "we have been steadily decreasing our reliance on sweepstakes and stampsheets and emphasizing the editorial sell," he said. "That has been very successful."