SPECIAL REPORT: Job Cuts in 2006 Painful — But Fewer Than in 2005

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By: Jennifer Saba

The crises at massive newspaper companies, the drought of advertising revenue, plunging circulation, barren foreign bureaus, withered news pages, a torrent of pink slips, the wrath of Wall Street — and yet, for all that, the number of jobs lost in 2006, at least at the larger metro dailies, was somewhat less than those lost in 2005.

For the second year, E&P conducted an informal review of larger newspapers that made cuts and found the industry shed at least 1,000 jobs. In our 2005 survey we tallied a loss of more than 2,000.

Bear Stearns did its own analysis and estimated that the industry lost 1,520 positions in 2006 versus 2,500 positions in 2005.

E&P’s figure (see details below) counts mainly the large and mid-sized papers grabbing headlines — from buyouts at The Dallas Morning News to reductions at the San Jose Mercury News. The review took into account papers and/ or companies that publicly announced reductions.

Some made the announcements but would not disclose final numbers. The Orange County (Calif.) Register, for example, said at the end of September, it was extending voluntary severance packages companywide. Executives declined a request for the total number accepted.

The decline in the rate of job cuts in the past year, while still painful, suggests that bigger metros — exposed first and hit the hardest by industry transitions (read: the Internet) — have almost reached their floor while smaller papers are just now beginning to slash.

In a report from Fitch Ratings, which covers large public companies, analysts expect labor costs to be much more difficult to reduce in 2007: “Most newspapers have been cutting staff for several years, and while they may not yet have achieved optimal utilization of their staffs, Fitch believes cultural issues and union affiliates could obstruct meaningful labor-related cost-cutting.”

The downsizing is a result of not only declining revenue but a restructuring of the industry as companies try to find more ways to become efficient. Increased outsourcing is one reason, said Barbara Cohen, president and founder of the Chicago-based Kannon Consulting. “We are already seeing that and we are going to see more of it,” she said.

The rethinking is hitting all departments, not just the newsroom, and all levels, not just the rank-and-file. For every ad sales guy pink slipped, there’s a vice president of advertising escorted out the door.

The Alameda Newspaper Group, the Bay Area-arm of MediaNews Group, said it was slashing jobs in news, advertising, circulation, production, and finance affecting papers like the Contra Costa Times and Oakland Tribune. It outsourced its advertising production department to a company based in India — a similar move made by The Columbus Dispatch in Ohio — and kicked some high level executives to the curb, like the vice president/advertising, the vice president/circulation, and the vice president/editor.

But also consider that for every job eliminated, publishers might be creating at least some new ones. The Press-Enterprise in Riverside, Calif., slashed 80 jobs but created an additional 30 in its online division.

Expect more of those kinds of moves, said newspaper analyst John Morton: “I don’t know if it’s settled yet how to determine what [staffing] you need on the Web side of the business.”

That old-rule of thumb in the newsroom that ties one editorial position for every 1,000 copies of circulation — a metric whose origins are “cloaked in mystery”, noted Morton — could go by the wayside. (The Inland Press Association’s Executive Director Ray Carlson, whose organization has been measuring newsroom staffing for 90 years, thinks that conventional wisdom sprang from the data itself.)

Said Morton: “If the newspaper business continues to shrink in circulation size and advertising continues to be weak” — he forecasts ad revenue will be down 1% to 2% in 2006 — “it wouldn’t surprise me to see more [cuts].”

The pace of job cuts at large dailies may be slowing but 2007 is barely four weeks old and already major newspapers announced buyouts — and more alarming — layoffs. The Philadelphia Inquirer fired 68, the St. Paul Pioneer Press laid off 9 and The Boston Globe and Worcester Telegram & Gazette needs to shed 125 positions through buyouts.

“I think there is much more uncertainty,” said Newspaper Guild President Linda Foley. “The use of layoffs as opposed to buyouts really does change the dynamic between management and employees. It’s a long-term morale problem that will continue.”

2006 Jobs Cuts (partial list):

Newsday, Jan. 6: 60 cuts mostly drivers and pressman

The Cincinnati Post, Jan. 18: 5 newsroom buyouts

Dow Jones & Co., Feb. 22: 20 management positions

International Herald Tribune, March 3: 36 cuts companywide

The Washington Post, March 10: 80 newsroom buyouts

The Press-Enterprise (Riverside, Calif.), May 17: 50 newsroom cuts with severance

Today’s Local News (Escondido, Calif.), Sept. 13: 27 companywide

The Dallas Morning News, Sept. 14: 111 newsroom buyouts

Akron Beacon Journal, Sept. 21: 67 companywide with severance

Journal Register Co., Michigan Division, Sept. 27: 82 positions in production, distribution, and administration

The Orange County Register, Sept. 29: would not disclose, companywide voluntary severance

The Plain Dealer, Cleveland, Oct. 17: 64 newsroom buyouts, other positions companywide

The San Diego Union-Tribune, Nov. 1: 67 companywide buyouts

Los Angeles Daily News, Nov. 2: 21 cuts

The Columbus Dispatch, Nov. 11: 90 advertising with severance

Alameda News Group, Nov. 11: 8 newsroom cuts, several more companywide

St. Paul Pioneer Press, Nov. 13: 20 cuts in advertising, technology, production, circulation; 21 editorial buyouts

Denver Newspaper Agency, Nov.13: 94 cuts in advertising, circulation, finance, IT

The Sacramento Bee, Nov. 22: 20 cuts in circulation and advertising with severance; 9 editorial buyouts

Kitsap Sun (Bremerton, Wash.), Dec. 4: 9 cuts editorial voluntary with severance

San Jose Mercury News, Dec. 6: 35 layoffs companywide

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