That has to be unnerving, but I can at least offer a little bit of comfort: The worst-case scenario the employees would be facing had they been purchased by private equity firm ZelnickMedia, which was also bidding for the publication.

The short version: Almost everybody gets fired.

Here’s the longer version of the plan, provided to me by a person familiar with ZelnickMedia’s bid. It sounds like a plausible idea for a PE group that specializes in turning around distressed assets–and a chilling one for anybody who draws a paycheck at BusinessWeek:

• Wind down BusinessWeek’s print business “as profitably as possible”–the company would have to honor existing subscriptions and could still sell ads in the magazine. But the focus would be on building up BusinessWeek’s Web site, which has a decent-sized footprint, though not a huge one.
• Dump almost all of the company’s newsgathering staff and outsource most of that work to Thomson Reuters (TRI).
• Employ a small handful of editorial employees–perhaps 20, down from the 200-plus who are there now. Some of them would run a Huffington Post-style aggregation site that produces no original content, and some more expensive hires would produce a smattering of high-quality reporting and writing designed to burnish/sustain the BusinessWeek brand. “Just to give it uniqueness and sizzle,” my source tells me.
• Dump most of the existing business side, as well, but overhaul and bulk up the sales force.

The insult-to-injury kicker: Under ZelnickMedia’s proposal, the buyer wouldn’t pay a dime for the publication it intended to rebuild. Instead, McGraw-Hill would pay the fund to take the publication off its hands. If that sounds implausible, consider that McGraw-Hill just announced that it will save up to $25 million next year by not owning the title.

Given the above terms, it’s easy enough to see why McGraw-Hill ended up going with Bloomberg. For starters, the winning bidder actually paid cash for the magazine, and McGraw-Hill will end up netting a $5.9 million gain, after taxes, on the deal.

Also important: McGraw-Hill won’t have to anguish as it watches one of its flagship properties get dismantled.

So what will happen to BusinessWeek now that Bloomberg owns it? Nothing nearly so drastic, at least in the short term. For now, Bloomberg is talking about bulking up the title, not shredding it, so that’s a good sign for both employees and readers.

Alas, Bloomberg can’t take on all of the magazine employees looking for jobs, and that pool is only going to get bigger.

Forbes slashed deep into its staff this week, and next week Time Warner’s (TWX) Time Inc. will lay out some of its layoff goals. I’ve heard Time Inc. employees refer to layoff plans as “tree-trimming” or “surgical,” but I think the trimming will feel much blunter to the folks who lose their jobs. The publisher’s cost-cutting plans include hundreds of layoffs–something likely similar to the cuts the publisher went through last year, I’m told.

The New York Post’s Keith Kelly reports today that Time’s News and Finance unit, which includes Time, Fortune and Sports Illustrated, will be particularly hard hit, and I’ve confirmed that myself.

UPDATE: No surprise here: BusinessWeek President Keith Fox is stepping down. Mild surprise: He’s staying on at McGraw-Hill. Here’s his memo:

When we announced that McGraw-Hill was exploring strategic options for BusinessWeek, I promised to communicate with you as openly and often as I could. In this spirit, I wanted each of you to know that I will be remaining with McGraw-Hill after the deal with Bloomberg is closed. I will continue to play a role in the integration post-close and plan to take on a new role at McGraw-Hill in 2010.

During this process, our collective goal was to find the best buyer for BusinessWeek. I am proud that I played a role in ensuring that BusinessWeek has a new home at Bloomberg, where it will thrive under the leadership of Norman Pearlstine. I am committed to the transition and helping in any way that I can.

It’s been a privilege to be the President of BusinessWeek. I thank Terry McGraw for his confidence and trust in me and Glenn Goldberg for his support, direction, clarity, and sense of humor. I’ve also been a member of an amazing team which has navigated the transformation of the media environment with agility, focus, passion, and integrity.

The team–Steve Adler, Jessica Sibley, Tania Secor, Linda Brennan, Roger Neal, and Carl Fischer–is the best in the industry. Like BusinessWeek, they have bright futures ahead of them. I will miss the daily interaction, but I am wiser (and a little grayer) because of their collaborative spirit and desire to make BusinessWeek the global leader in business that it is today.

I also have a special thanks to Patricia Hipplewith, my assistant, who juggled my calendar, protected me from solicitors, and kept me on schedule and well fed! She is the personification of commitment and integrity.

I am humbled by BusinessWeek’s 80-year history. Thank you for allowing me to play a small part in it.

Keith

There’s nothing newsworthy in this memo, sent out last week in the wake of Forbes.com CEO Jim Spanfeller’s departure. There’s no staff-shuffling detailed, and no grand strategy revealed. It’s really not much more than a “keep your head up.” But things are dour enough these days that even that counts for something, I think.

The sun has risen. Another day. We kick on. Our audience knows little and probably cares less about our internal organization. What they do care about is that we continue to serve them with indispensable journalism in that forthright, robust way that is our hallmark.

The late Jim Michaels liked to say that a Forbes story made readers richer or smarter. Smarter, certainly, about the world around them and understanding the choices they’ll be facing; smarter at running their business and career; smarter at investing, and smarter at enjoying the rewards of success. But a Forbes story can also make readers richer in spirit, heart or mind. Richer/smarter remains a good lens to look through at all we do.

We celebrate entrepreneurism all the time, and we should look for that same spirit in ourselves. You don’t need me to tell you that our industry is changing beyond all recognition, both in its forms and in the business models that pay for it.

We now compete for the time of busy people with a whole range of new competitors with an equally broad range of journalistic standards, approaches and ways of paying for what they do. Now more than ever, we need to be flexible and open to how we think about our journalism, and to question past assumptions about how we work — holding fast to our core principles and never putting the trust our audience has in us and our brand at risk — but being ready to experiment with how we create and distribute our journalism.

Not every one of those experiments will work. We shall have to be disciplined in measuring their relevance and usefulness to our audience, and bury our losers while cultivating our winners.

As at every publication, there are serious constraints now on our resources, but there are no restrictions on our imagination, enthusiasm or editorial entrepreneurship beyond those we impose on ourselves. We all still have to do our day jobs, make sure our audience is served in the most forthright way we know how with great journalism, and help support a business underneath it all to pay our salaries.

I learned long ago that there is nothing like robust cash flow to support robust journalism. We shall still have to set priorities for what we can take on, but I am sure I speak for [Forbes magazine editor] Bill [Baldwin] and all our senior colleagues when I commit to do all I humanly can to get as many of the best of your new ideas in front of our audience as we can.

We are a publication across all our media for people in business, rather than a business publication, which lets us range wide in what we cover an how. We now have a broad audience comprised of many overlapping sub-audiences, but all seeking in various ways that Forbesian voice, insight and timely wisdom that we offer.

We need to stay relevant to every one in a changing and challenging world. So let’s kick on with vigor and imagination to make as large an audience as we can richer and smarter however we can. ‘Cos that is what we do. And our audiences deserve no less.

[Image credit: Eye of einstein]

Last month, the Time Warner (TWX) magazine unit announced a sweeping reorg that is expected to cost about 600 employees their jobs. But the details have yet to be announced.

That started changing today, but my understanding is that the cuts won’t be accomplished with one swing of the ax, which is unfortunate for everyone involved.

Today’s memos will at least add some clarity, and I’ll republish them here as I get them, with your help. As always, I keep all correspondence anonymous: peter@allthingsd.com.

So far I’ve collected memos from four of the five titles, but am still looking for details on Money. Time, SI, People and Fortune are looking for 90 volunteers to leave their jobs.

Bear in mind that these memos only deal with editorial jobs. I’m assuming there are also significant cuts planned on the business side. Details as I get them.

[UPDATE: Some cuts on the business side, too. The company has laid off 92 people from its consumer sales and marketing group.]

Fortune managing editor Andy Serwer doesn’t spell out the number of volunteers he’s looking for in his note, but I’m told he informed staff today that he needs about a dozen positions eliminated:

Unfortunately, we will need to reduce staff at Fortune in the writer-editor, writer-reporter, designer, editorial assistant and copy coordinator Guild categories, and we are asking for a number of volunteers to leave the company with a severance package. If you are interested in confidentially exploring this option, please contact Dawn Dunlop in HR at [redacted] or Edith Fried at [redacted] by Friday, November 21, 2008. If we do not have enough volunteers, we will need to begin a process of involuntary layoffs. For your reference, the Company’s severance formula is in the Guild contract and is also posted on Time Traveler.”

Sports Illustrated needs 40 bodies gone within two weeks, says managing editor Terry McDonnell:

For the reasons outlined in Ann Moore’s reorganization announcement of 10/28/08, the Sports Illustrated Group will reduce the size of its staff across all properties. At the magazine, we will reduce staff in the following guild-covered categories:

• copy editors
• photographers
• designers
• photo equipment technicians
• picture catalogers
• picture researchers
• reporter-researchers
• research assistants
• writer-editors
• writer-reporters

A number of jobs not covered by the guild will also be eliminated at the magazine and across the group.

Approximately 40 guild and non-guild volunteers are needed over the next two weeks to avoid involuntary job eliminations. If the number of volunteers falls short by Monday, December 1, involuntary layoffs will begin.”

People wants to drop 18 editorial employees (via Gawker):

As part of a broad Time Inc. work force reduction, I regret to announce that People magazine will be making cuts in its editorial staff. We are looking for the volunteers to accept severance packages in the following Guild-covered job classifications:

• up to 6 reporter-researchers
• up to 4 Los Angeles-based staff members from among staff correspondents and writer-editors
• up to 4 New York-based staff members from among staff correspondents, writer-editors and writer-reporters
• up to 3 copy editors
• 1 research librarian

We are also looking for up to two Guild-covered volunteers each in the Art Department and photo department, and one in the News Bureau.

In addition to this call for Guild volunteers, non-Guild employees may inquire about the possibility of volunteering for a severance package.

I urge all those interested to contact People’s human resources representatives [redacted] for details regarding their particular package.

In addition to the above cuts, we are looking for savings from full-time staffers interested in working a four-day week (Tuesdays off) for commensurate salary. This call is voluntary, and final decisions will be made based on business needs and management discretion.

The call for volunteers expires on Dec 1. If necessary, after that we will follow the Guild contract procedure for conducting involuntary layoffs in Guild categories.

If you have any questions, please see me or your department heads.”

Time is looking for 20 volunteers (via Newsweek.com editor–and former Time employee–Mark Coatney):

Due to the corporate restructuring, we need to reduce approximately 20 staffers at TIME across the following guild-covered categories: edit traffic assistant, writer-editor, staff correspondent, writer-reporter, reporter-researcher, designer, research cataloger and research librarian.

Volunteers in these positions or any others can raise their hands any time in the next two weeks. If we do not have enough volunteers by Monday, November 24th, we will begin a process of involuntary layoffs.”