McClatchy Newspapers To Lay Off 10% of Workforce
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The McClatchy newspaper company announced its second major round of job cuts in three months today and blamed a sour advertising environment in trimming its payroll by 10%.
Although the announcement did not specifically refer to layoffs, The McClatchy Co. said only half of the 1,150 new reductions would come through voluntary buyouts and attrition.
The company said the job cuts and other initiatives across the company would save $100 million over the next year, not including severance costs of about $20 million.
In June, McClatchy also announced a trim to its work force of about 10%, which meant the loss of 1,400 full-time jobs and savings of $70 million a year. Two months later, it announced a one-year pay freeze for remaining employees effective September 1.
“It is painful to announce these staff reductions, but the continued restructuring of our company is necessary given the relentless economic downturn and its impact on our business,” McClatchy’s chairman and chief executive, Gary Pruitt, said in a statement.
He said the cuts should position McClatchy to grow as a digital company and to deliver “high-quality news and information in whatever medium our readers want to receive it.”
The company said it would provide severance and continuation of benefits to affected employees.
Based in Sacramento, Calif., McClatchy is one of the nation’s leading newspaper publishers. It has 30 daily papers, including The Sacramento Bee and The Miami Herald, and about 50 non-daily newspapers.
McClatchy said would try to maintain editorial quality by sharing staff across newspapers. Papers in Raleigh and Charlotte, N.C., for instance, will share sports and political reporting staff, while the company will take advantage of new technology to share editing and design duties.
Many newspaper companies have undertaken significant cuts this year. Earlier this month, Gannett Co. said it was cutting about 100 management jobs at its newspapers across the country, less than a month after the nation’s largest newspaper publisher eliminated some 1,000 positions.
Individual McClatchy newspapers, including The Sacramento Bee and The Olympian in Olympia, Wash., also have offered voluntary buyouts this year. It was not clear whether today’s announcement includes those cuts; the company did not immediately return phone and e-mail messages.
Like the rest of its industry, McClatchy has seen ad revenue plummet this year because of the weak economy and the continuing shift of audiences and advertisers to the Internet from newspapers.
Today, the company said advertising revenue declined nearly 18% in August over last year. Although the decline wasn’t as bad as those it saw in June and July, which exceeded 19%, McClatchy has faced double-digit declines all year on weak classified and national advertising.
In August, McClatchy’s classified advertising dropped 30%, while national advertising declined 20%. Print advertising overall declined 20%.
A gain of 7.4% in its online advertising revenue could not offset the print drop because Internet ads made up only 13% of overall advertising revenue at the company.
Shares in the company fell 30 cents, or 8.8%, to $3.10 in extended trading following the aftermarket release of the revenue figures and job cut announcement.
McClatchy also said today it was cutting by half, to 9 cents per share, its quarterly dividend rate, payable October 6 to shareholders as of September 26. Mr. Pruitt said the dividend cut would give the company more cash to reduce debt