McClatchy: Slashing 1,150 Jobs

Blaming a sour advertising environment the newspaper company, McClatchy Co., has declared for a second batch of work force reduction in three months.

A $100 million of savings is expected over the next year if the company cuts back in employment and other initiatives. Another $20 million will be saved from severance cost. The company said it anticipates that part of the 1,150 new cuts to come through voluntary buyouts and attrition and the rest through layoffs.

The first cut of work force came in June which saved the company $70 million a year while losing 1,400 full- time jobs. Later the company declared a one-year pay freeze for employees who stayed behind effective Sept. 1.

Reformation of McClatchy Company

McClatchy's chairman and chief executive, Gary Pruitt stated that the notice on staff reductions has been excruciating however it is necessary due to impact on the company of the persistent economic downturn. The continued restructuring of the company is obligatory. The company has assured that it would give the affected employees severance and continuation of benefits.
Pruitt further said that the cuts ought to position McClatchy to expand as a digital company and to provide high-quality news and information in whatever medium our readers want to receive it.

Over the next few months further reductions are to take effect. McClatchy which is based in Sacramento, California is one of the nation’s leading newspaper publishers. The Bee and the Miami Herald are among the 30 daily papers published by the company. It also has about 50 non-daily newspapers.

Individual papers will have to evaluate their needs so there is no approximation on how many of the reduction would come from newsrooms or management ranks.

The editorial quality of McClatchy will be maintained by sharing staff among newspapers. Sports and political reporting staffs will be shared by the papers in Raleigh and Charlotte, N.C. as the company will be using new technology to share editing and design duties.

Imperative Reductions Owing to Sour Advertising Environment

Gannett Co. is among the many newspaper companies who have carried out significant cuts this year with about 100 management jobs at its newspapers across the country

With the weak economy and continuing change of readers and advertisers from the newspapers to the Internet, McClatchy saw ad revenue to drop this year.
The company stated that nearly 18 percent of advertising revenue dropped in August. McClatchy's classified advertising dropped 30 percent, while national advertising declined 20 percent. Print advertising overall declined 20 percent. Its online advertising revenue gained a 7.4 percent but it could not offset the print drop because Internet ads made up only 13 percent of overall advertising revenue at the company.

According to Pruitt the dividend cut would give the company more cash to reduce debt.