Nothing quite like it had ever happened before in the hallowed house that Luce built -- Time Inc., home of Time, Life, Fortune, People, Sports Illustrated, Entertainment Weekly and a score of others, including Money magazine. On November 24, the Monday before Thanksgiving, virtually the entire top editorial echelon of Money -- one of America's most successful and highly profitable monthlies -- was called in, one by one, and fired. No warning. No visible reason for so drastic and shocking a move. Among the casualties:

* Caroline Donnelly, 52, executive editor, a Money staffer since the title's birth in 1972. She had just returned from a special assignment in Hong Kong, producing her third trial issue of a Money insert in the Southeast Asian edition of Time.

* Richard Eisenberg, 41, executive editor, a nineteen-year veteran, widely regarded as a rising star and potential candidate to lead the magazine eventually.

 * Frank Merrick, 55, assistant managing editor and top editor of the magazine's profitable newsletter, Retire With Money.

* Rudy Hoglund, 55, art director; former art director of Time and a twenty-year veteran of the company.

 * Junius Ellis, 47, writer of the investment advice column "Buy Sell Hold," who joined Money in 1984.

* Ann Reilly Dowd, Washington bureau chief; the bureau was shuttered and one other, junior employee was dismissed.

 The purge had its roots in a November 3 memo to the Time Inc. staff from editor-in-chief Norman Pearlstine, 55, announcing that Money's highly respected managing editor of eight years, Frank Lalli, 55, was moving up to the new post of senior executive editor of Time Inc. to "undertake a number of special projects," including creating foreign editions of Money and other magazines. The memo acknow-ledged that Lalli had enhanced Money's position as the nation's "largest and most influential" journal of personal finance -- its profits were on course for a record $42 million in 1997, and ad revenue was up 18 percent to $88 million for the first nine months of the year. Last February, Advertising Age named Lalli Editor of the Year (along with Fortune managing editor John Huey, 49).

 Replacing Lalli, Pearlstine said, would be 33-year-old Robert Safian, a senior editor at Fortune who'd been at the company only nine months. Safian had been executive editor of Steve Brill's American Lawyer at 26, and put in three years at Money competitor SmartMoney.

Along with that startling news, Pearl- stine said that Money would become part of a new structure called the Business Information Group that would include Fortune and Your Company, a bi-monthly magazine for people who run small businesses. And Safian would report not to Pearlstine but to Fortune's John Huey, and to Richard Kirkland, 46, Huey's deputy managing editor. Huey thus becomes the only editor in the far-flung Time Inc. empire to have two major magazines in his control.

When Huey told the victims that they were being dismissed, employees throughout the company were surprised, dazed, and bewildered. Mass firings in good times just weren't the style at paternalistic Time Inc., an industry pacesetter that has long cherished a reputation for treating its people extremely well -- "Paradise Publishing," the trade press had dubbed it. A shiver of apprehension tinged with gloom permeated Time Inc.'s Rockefeller Center headquarters, according to staffers interviewed by cjr. High editors at some other Time Inc. magazines wondered: Is this the reward for years of loyalty -- and for making your numbers?

One thing seemed clear: Pearlstine wants a new, revamped Money -- almost surely to include a major redesign. Money has long been a huge success, but newsstand sales slid 15.5 percent in the first six months of 1997, largely due to a price hike from $3.50 to $3.95. Total circulation was down 6.7 percent in the same period to 1.94 million even as ad income rose. Competition was growing stiffer from SmartMoney, Worth, and the new Bloomberg Personal Finance magazine.

 When he was executive editor of The Wall Street Journal, Pearlstine was the major force in creating SmartMoney (which is co-owned by Dow Jones and Hearst). Now the buzz is that the Money Pearlstine yearns for would be more surprising, sophisticated, and edgy to attract new, younger readers. Already Safian has hired four veterans of SmartMoney and The American Lawyer for important positions at Money.

Pearlstine is under tremendous pressure from parent Time Warner to raise the magazine group's already rich profits. Combining some of the editorial operations of Money and Fortune is one tactic he is employing to reduce costs. The business sides at both magazines are controlled by group publisher Michael Pepe. The plan is that some writers and editors will contribute to both titles, and that the two copy desks may be merged.

 Lalli, says an insider, was no great fan of such consolidation, which may have hastened his departure. He also resisted boosting Money's cover price to $3.95. But an eight-year term as top editor of any Time Inc. magazine is considered a long run. One Lalli associate says: "If you gave Frank some truth serum, he'd probably admit that, at this stage of his career, he was entering Central Park and heading for the finish line of this particular Marathon."

 Pearlstine, Huey, and Safian would not respond to cjr's queries about the expected alterations in Money's format, content, and procedures. It's simply "premature" to talk about it, Safian said. But Time Inc. folk -- editors, writers, production people -- wonder if Money's experience presages a new style of running the company's legendary armada of magazines. What consolidations might take place at what publications? For what strategic purpose? How many jobs might be lost?

And most of all: How does the company calm the jitters of hundreds of employees who fear that unheralded mass firings are a brand new operating technique and productivity tool in what once was the comfy-cozy and secure atmosphere of Time Inc.?

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