It's got to be a sad day at the Newsweek Daily Beast Co., where the layoffs that have been expected since the company announced it would fold the dead-tree edition of Newsweek have begun.

The staff got an email at lunchtime today from editor in chief Tina Brown and CEO Baba Shetty notifying them that editorial staffers would learn if their positions are being eliminated.

The company announced in October that it would take Newsweek digital-only in 2013—it's expected to lose $40 million this year, mostly from the newsmagazine—ending a costly experiment to combine the weekly publication and online upstart into a profitable entity.

Meantime, it's exploring the possibility of moving the Daily Beast to a metered access model, à la The New York Times, Adweek has learned.

The Beast's traffic grew considerably when it merged with Newsweek in 2010 and added its traffic, but then fell after Newsweek let its traffic deal with MSNBC expire. In recent months, though, Brown has been talking up the Beast’s traffic growth.

The reasoning behind a metered model that lets visitors see a set number of stories for free (versus a hard paywall) is that it could let the Beast hold on to its light users and capitalize on its heavier ones. The company would have to figure out what to do with people who subscribe to Newsweek’s iPad edition that will replace the print edition; it's unlikely the company would ask them to pay for access to both.

In any case, while many publishers have been embracing paywalls and subscription revenue as advertising growth stagnates, few have been wildly successful; those that are (the Times, the Financial Times, The Wall Street Journal) produce content that's highly specialized and differentiated. Nor has the model been a panacea, as evidenced by the Times' latest attempt this week to eliminate staff.

Along with the editorial layoffs, Brown announced leadership changes as the company gets ready for the digital transition. Newsweek executive editor Justine Rosenthal was named editorial director of the overall company. Tunku Varadarajan, executive editor of Newsweek International, was named editor of the forthcoming digital Newsweek Global. Lastly, Deidre Depke was promoted to editor of the Beast, from executive editor.

Here’s Brown and Shetty's memo in full: