In response to declining revenues, newspaper publisher McClatchy Co. is cutting 10% of its work force — around 1,400 jobs.
The cuts, which begin sometime this week, are expected to save the company $70 million annually. The bulk of departing employees is expected to be gone by the end of July, thanks to attrition, buyouts and firings, though the full process will likely take the rest of the year. McClatchy’s Miami Herald — one of the largest of its 30 dailies — is doing away with 17% of its employees, or 250 positions.
“We have been transitioning steadily and successfully from a traditional newspaper company to an integrated multimedia company for some time,” Gary Pruitt, CEO of McClatchy, said in a statement. “The effects of the current national economic downturn — particularly in real estate, auto and employment advertising — make it essential that we move faster now to realign our workforce and make our operations more efficient. I’m sorry this requires the painful announcement we are making today, but we’re taking this action to help ensure a healthy future for our company.”
Between the end of 2006 and April 2008, McClatchy eliminated 13% of its work force as part of a five-year plan for a smaller employee base and overall savings of $95 million to $100 million. However, after posting a 14.2% revenue decline for the first five months of this year, the company had to get more aggressive in its savings techniques. May year-to-date circulation revenues were down 5.3%, and total advertising revenue fell 15.4%.
“The cutbacks were already in our plan; we recognized that we needed to be a smaller company with smaller revenue and cash flows, and the current downturn accelerated that,” Ellen Lintecum, treasurer, McClatchy Co., reiterated. “We’ve been focused on becoming a hybrid company for a long time, and we’ll continue to focus on our online operations where we have had audience growth, but we will remain committed to our print product as well.”