Ad Revenues Way Down, ‘Daily Herald’ Employees Told To Take Unpaid Days Off

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By: E&P Staff

In a new round of aggressive cost-cutting at the family owned Daily Herald in suburban Chicago, employees were told late Wednesday that they must take an unpaid day off every month until the newspaper’s revenues rebound.

Corporate managers at the Paddock Publishing Co.-owned paper will also forgo the raises they were scheduled to get in April, and take a 5% pay cut, President and CEO Doug Ray said in a memo to employees.

Ray said the unpaid “furloughs” are expected to be temporary, “but it will continue until the revenue picture improves and the cost basis of the company is in balance.” He added merit raises for employees “will continue as scheduled.”

Ray also strongly hinted that layoffs are coming at the paper.

“Reengineering and reorganization projects will be accelerated, with the goal of eliminating functions and positions no longer essential to our strategic plan,” he wrote. “Every department is analyzing operations to find these efficiencies and to focus on those things which will grow our business.”

The paper, Illinois’ third-largest daily, has maintained a hiring freeze for months, and has been reducing headcount through attrition, but Ray said that has not been enough to offset the harsh advertising environment.

Help-wanted advertising volume is down 45% from last year, Ray wrote, and real estate revenue has sunk by 40%. “Housing-associated categories also are in decline–home furnishings, home electronics, home improvement–off more than 35 percent compared with a year ago,” he wrote.

The paper is also being hurt by “unexpectedly aggressive price increases” in newsprint, he said.

Among the steps the paper is taking to regain revenue is a change in sales compensation and territories that places more emphasis on Paddock niche products, its Spanish-language weekly Reflejos and Web products.

Ray said new Web products will be introduced later in the year, and the newsroom is in for changes, as well. “To gain a wider audience which will in turn get better results for our advertisers, a team of editorial department and interactive staffers is working to create a newsroom of the future — a 21st Century news operation designed for immediacy and multi-faceted presentation of news,” he wrote. This restructured newsroom will be complete within a few weeks, he said.

“The Daily Herald’s prominent position in the Yahoo! Newspaper Consortium puts us on a fast track to new Daily Herald/Yahoo! Internet initiatives, an alliance which bodes well for the future,” he wrote.

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