Burdened With Debt, Citing Decreasing Home Sales, McClatchy Cuts Newspaper Jobs
SACRAMENTO, CA (June 17, 2008) – The Miami Herald, a McClatchy Co. newspaper, will reduce its staff by 250 people, or 17 percent of its workforce. Herald publisher David Landsberg said the fulltime staff of 1,440 had to shrink through voluntary buyouts or layoffs along with eliminating any open positions.
McClatchy's chief executive officer Gary Pruitt said the Herald was being hit harder than other McClatchy-owned newspapers because the Herald's "performance has been worst than most, if not all, of the newspapers ... and there were opportunities for greater efficiencies."
The Herald's newsroom is expected to lose about 60 people; about 40 are already marked for voluntary buyouts or layoffs, including two photographers.
At the News & Observer in Raleigh, NC, a McClatchy newspaper, the publisher says 70 jobs - or about 8 percent of their workforce - will be cut.
Another McClatchy paper, the Charlotte Observer, will lose 123 posistions, about 11 percent of its workforce, 22 from the newsroom.
"We did all we could to avoid this," Observer publisher Ann Caulkins said.
"We may not be at the bottom yet," Pruitt said in the Sacramento Bee.
And the News Tribune, a McClatchy paper in Tacoma, WA, says it will lose 84 jobs, about 13 percent of its staff, in the cuts.
McClatchy publishes 30 daily newspapers nationally, and the company says 1,400 jobs will be cut nationwide, about 10 percent of its employees.
Based in Sacramento, CA, where they also own the Sacramento Bee, McClatchy says that it gets about a third of its advertising revenue from newspapers in California and Florida, and that those markets have been hit particularly hard by the ongoing slump in home and auto advertising sales.
The Bee is McClatchy's largest paper, and they're scheduled to eliminate 86 jobs, or 8.1 percent of the Bee's workforce. The total includes 46 layoffs, the newspaper says.
McClatchy says their advertising revenue is down 17 percent compared to this same time last year. The Newspaper Association of America reports that advertising sales are down 14 percent across the industry for the first quarter of 2008. Because of the markets they are in, McClatchy says they have suffered more than some of their peer newspapers.
The job cuts will save them $70 million each year, McClatchy says. They also say that over the next four fiscal quarters they will try to cut spending by as much as $100 million, including cuts such as using less newsprint.
McClatchy has linked their financial problems to "the housing bubble." The company says they bought larger rival Knight Ridder in June 2006 "at the peak of the housing bubble" and that soon after the purchase "the bubble burst." Some of the markets hit hardest, McClatchy says, were California and Florida where their advertising revenues dove down 23.5 and 16.7 percent, respectively, in May.
The company also says the Knight Ridder purchase burdened them with $2.4 billion in debt.
A McClatchy newspaper in Biloxi, MS, called the company's moves "a restructuring."
Quoting McClatchy's CEO Pruitt, the Sun Herald reported that McClatchy is "transitioning steadily and successfully from a traditional newspaper company to an integrated multimedia company ..." and that the current "economic downturn" means McClatchy has to move faster now to "realign our workforce and to make our operations more efficient."
The Sun Herald is losing 10 jobs in the restructuring.
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