The New York Times Co. is set to announce quarterly earnings later this week. Monday, bad news came early and by surprise.
With a need for greater cost reductions, the Times announced a plan to cut 100 newsroom jobs (8% of total) by year end. This on top of budget cuts and a 5% employee pay cut already in place.
The Times is approaching the process with a buyout offer. Employees will receive detailed information packets and have forty five days to decide whether or not to apply. The buyouts are expected to offer between two and three weeks of salary per year of employment. If there aren’t enough volunteers, the company will implement layoffs to reach the quota.
Earlier this year, Times executives said they didn’t anticipate further newsroom cuts in 2009. That they changed their minds isn’t surprising given the current ad market and the struggles of the print industry. Newspapers are fighting an increasingly competitive online global arena and it’s clear there is no easy answer for how to succeed. There’s so much information beamed at audiences. To stand out from the volume (below cost and consistently) is a difficult task.
What is odd about the Times’ news is the timing. Delivering bad news days before earnings… the foreshadowing doesn’t look good.
Acknowledged Executive Editor Bill Keller in a letter to the company’s staff, “I doubt that anyone is shocked by the fact of this, but it is happening sooner than anyone anticipated. When we took our five percent pay cuts, it was in the hope that this would fend off the need for more staff cuts this year. But I accept that if it’s going to happen, it should be done quickly.”
The classic “pull off the band-aid quick” logic may not be explanation enough for the market.
The Times has a bigger newsroom staff than any other US paper. Even with the cuts, it will still be the largest.
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