Hearst Eyes Job Cuts at 'SF Chronicle'

By: Michael Liedtke, AP Business Writer (AP) The newly appointed publisher of the San Francisco Chronicle told labor leaders the newspaper may need to prune as many as 500 jobs from its payroll to relieve its financial stress amid a severe advertising downturn.

Steven B. Falk raised the prospect of cutbacks Tuesday, just two weeks after the Chronicle's owner, the Hearst Corp., promoted him to replace former publisher John Oppedahl. "We have too many employees for a paper our size. That has to change," Falk said in an interview after the union meetings.

The Chronicle employs about 2,400 workers to produce a newspaper with a weekday circulation of 512,000.

Falk refused to specify how many positions he hoped to eliminate, but acknowledged telling labor leaders that the newspaper has about 500 more workers than it needs, with most of the surplus concentrated in its operations outside the newsroom. Eliminating 500 jobs would translate into a 20% reduction.

Falk declined to discuss the precise timing of the cuts. "We are going to run, not walk" in pursuit of savings, Falk said.

New York-based Hearst inherited a fat payroll in November 2000 when it assumed control of the Chronicle in a $660 million acquisition.

As part of that deal, Hearst sold the San Francisco Examiner for $100 while agreeing to pay up to $66.7 million of the new owner's bills as part of a subsidy set to expire this year.

Even though Hearst gave up the Examiner, it maintained most of the staff that produced and distributed the two papers.

Most of the Chronicle's workers are covered by union contracts, set to expire in 2005, that include guarantees on job security that have prevented the Chronicle from trimming its labor costs more aggressively, said Doug Cuthbertson, chairman for the conference of newspaper unions representing the newspaper workers.

Falk said the job cuts will be realized through "win-win" negotiations with unions. In 2001, the Chronicle trimmed 220 jobs, or about 8.5% of its work force, through a combination of layoffs and buyout packages.

The need for further cuts reflects a sharp advertising downturn that has hit Northern California media particularly hard.

The Chronicle's help-wanted advertising -- a major revenue source for newspapers -- has plunged by 70% from a few years ago when a hiring frenzy in the high-tech industry spurred demand. "I doubt that much of that will ever come back," Falk said.

The slump has resulted in staff cuts at most of the Chronicle's rivals. Last month, the struggling Examiner laid off most of its staff and started distributing its editions for free.