Thursday, April 1, 2010

Advanstar signs deal to offshore production with HCL Technologies; B2B media firm to eliminate 100 positions

Advanstar Communications has signed a deal with HCL Technologies to take over production duties at the B2B media company.
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According to WNMT in Duluth, the company will be eliminating 100 jobs as HCL takes over production duties and shifts them to India.

"In this highly competitive media marketplace, we need to focus on the things that we do well, creating a valuable platform for our clients, while handling other functions through partnerships or outsourcing agreements that will provide the economies of scale we need to operate more efficiently," said Chief Executive Officer Joe Loggia in a release.

"Because of its impact on our employees and their families, this was not a decision we made lightly. Given the many challenges facing the business-to-business print industry, we must change the way we do business in order to continue to provide maximum value and service to our customers," Mr. Loggia said.

HCL Technologies also offers digital publishing services, though no mention of the company taking over web duties was mentioned in the release. As a result it appears this is purely a cost savings measure. The loss of production personnel, however, will severely limit Advanstar's ability to compete going forward in electronic publishing unless the company decides to create a New Media division.

In September of last year Advanstar reached an agreement with its lenders to lighten its debt burden, shedding $385 million. The company is another B2B owned by Veronis Suhler Stevenson -- this time in partnership with hedge fund firm Anchorage Advisors. CEO Joe Loggia joined Advanstar when his company, MAGIC trade shows, was acquired. He became CEO in 2004.

1 Comment:

Nick said...

What surprises me is that they offshore production but continue to pay through their nose for something like telemarketing to renew their magazine subscriptions - it's one of the 1st areas which should be offshored if you're looking to save costs!