The Philadelphia Story: 'A Big Disruption'

By: Jennifer Saba On the Friday before Halloween, a news day that any editor or reporter normally would relish with Supreme Court nominee Harriet Miers' withdrawal and I. Lewis Libby's indictment, Amanda Bennett was talking about how many staffers she was going to lose at The Philadelphia Inquirer.

As editor, Bennett was in the unenviable position of having to shrink the newsroom's staff by 15% through a series of buyouts, a loss of 75 reporters. Bennett modestly characterizes it as "a big disruption." Announced on Sept. 20, the mandate also affects the Inquirer's partner tabloid, The Philadelphia Daily News, which was told to shed 19% (25 positions) of its newsroom staff.

Management tried scaling back in other areas -- fewer routes, thinner paper -- before arriving at this point, but that didn't do the job. "We cut everything that wasn't nailed down," Bennett says in her glass-sided office located off a hallway lined with Pulitzers. Every so often, the caged zebra finches in her office punctuate her comments with squeaks. "But after a certain point, you just run out."

Rumors that cuts were coming had long been circulating. Many, including Bennett, thought the number would be lower, around 50 buyouts. "The shift from 50 to 75 was rather sudden, and it had to do with the deteriorating financial situation," she says.

Joe Natoli, chairman and publisher of Philadelphia Newspapers Inc. (PNI), which owns the Inquirer and the Daily News, says the Inquirer is profitable but declines to reveal the margin. The paper has been socked with department store mergers, consolidation in the telecommunications industry, tepid recruitment advertising (the one bright spot for the industry) and an auto category that's stuck in reverse. Circulation at the Inky took another hit in the latest FAS-FAX, dropping 3.1%. Its ad revenue is down 3% to 4% this year; on average, the paper pulls in about $400 million annually in ads (roughly 80% of its total revenue).

Plus, the Inquirer is the largest paper in the Knight Ridder chain, a company that is under so much pressure from Wall Street and its shareholders that it's exploring a possible sale. "We looked at the future and said, 'is it going to get any easier?'" says Natoli. "Well, probably not."

Both Bennett and Natoli pushed for buyout packages to be offered to guild members only, hoping to prevent layoffs. If a manager chooses to retire, that person counts in the 75 staffers that have to go. PNI expects to reap roughly $7.5 million per year from the moves: 100 positions at approximately $70,000 to $80,000 each.

"We have two goals out of this," Natoli says. One is to reduce costs in a fair way. The second is to "publish newspapers that we will feel good about and our readers will feel good about going forward."

But Gail Shister, a television columnist who has been with the paper 26 years and is not taking the buyout, sees the issue from a different perspective. "They are trying very hard to put on a happy face, trying to be optimistic and positive, and that's a tough thing to do given the overall sadness and anxiety," she says. She likens this to "the Jack Kevorkian school of P.R. It's pretty hard to put a smiley face on this one. But you have to, otherwise you become dispirited and give up."

A 'Humane' Alternative

No one can dispute that it's generally better to let people leave willingly than to hand out boxes for employees to clean out their desks with little notice, even if some of those volunteers may be highly valued employees. "We're not in favor of the buyouts," says Henry Holcomb, president of the Newspaper Guild of Greater Philadelphia and a business reporter at the Inquirer, "because we don't think the staff is too large. But buyouts are more humane."

An employee does not have to be near retirement to take the deal. The package in Philly is offered in three tiers: guild members nearing retirement (tier 1), and those who are considered non-retirement employees, depending on years of service (tiers 2 and 3). All three tiers offer two weeks of pay at the individual's current weekly rate for every year of service at Knight Ridder -- not just the Inquirer -- capped at 52 weeks.

The packages are split on health care coverage. For those in tier 1 there are four options, the most generous covering two years of health coverage. In tier 2, employees are covered for one year; in tier 3, for six months.

If the Inquirer did not get to 75 buyouts, management would have had to resort to handing out pink slips. In Philadelphia, the guild structures layoffs based on seniority with little leeway: last in, first out. That sweep typically nets younger employees -- especially some 40 reporters who were hired three years ago under former editor Walker Lundy.

"Each buyout has exacted its own pain because we've lost really good reporters and editors at every turn," says Emilie Lounsberry, a legal affairs reporter who has been with the Inquirer for more than 20 years. She notes that this buyout is one of many in the paper's history, but "this one hit harder because we are faced with the possibility of layoffs."

As of Nov. 21, 69 newsroom staffers had taken the buyout; more than 90 applications were received between Sept. 20 and Nov. 4. After Nov. 4, there was a seven-day period during which applicants could reconsider. Once the final buyout count was set, management could determine which categories (reporters, copy editors, designers) would be affected by layoffs, if any. By the end of the process the buy-out goals were reached and on Nov. 23 it was announced that neither newsroom would face layoffs.

The Art of Subtraction

Back in her reporting days, Bennett experienced reduction during several rounds of layoffs at The Wall Street Journal that she recalls were "nasty." And though she wrote a book on corporate downsizing, The Death of the Organization Man, published in 1990, she has never had to wield the axe -- neither as managing editor at The Oregonian, nor as editor of the Lexington (Ky.) Herald-Leader. Bennett was named editor of the Inquirer in 2003.

Though she's worked in management at both private and publicly held companies, "at 30,000 feet there's no difference," she contends. "In publicly held companies the reaction is shorter and more acute and it's more visible, but I can't say that there is any less economic pressure because of major shifts in the industry."

Despite the burden of having to eliminate so many jobs, Bennett appears sure-footed about the process. She's upbeat when she describes the other changes the paper will undergo. Kicked back on a couch, dressed in a blue sweater and black pants, she answers questions with the confidence of someone who's clearly focused on the Inquirer's future -- and completing the often arduous tasks required of her.

In October, her staff knew that Bennett was agonizing over having to cut so many people from her newsroom, but she knew cuts were coming some five months before the announcement. In that time span, Bennett says she had her doubts as to whether she could manage a paper with fewer reporters: "Once I worked through it and figured it out with the people I work with that it's not going to be fun ... if we can handle this correctly, we can keep it being a great newspaper. Once we decided that and I decided we can do it, everything changed.

"In some ways, we can come out better in this by focusing," she adds.

Bennett notes that just because a staffer applied for the buyout package, it didn't mean he was going to get it. "I have made it very clear to the staff that we are not necessarily going to accept everyone who applies for the buyouts -- even if it means we have to lay off people. My primary goal is the preservation of the quality of the newspaper."

Natoli, Bennett, and her team determine who can go on a case-by-case basis. By mid-November, 19 staffers' buyout applications had been rejected. There's the chance that some of those 19 will walk out anyway. "A lot of it is going to depend on who is raising their hands in a department," Bennett says. "Let's just say, for example, and this is not a true example, suppose we had four designers and three of them raised their hands. I can't take all three."

To some staffers, the decision-making process behind who will stay and who goes appears random. "In many cases it seems arbitrary," says Monica Yant Kinney, a metro columnist who has been with the paper nine years. Paul Nussbaum, a 53-year-old national correspondent who has been with the Inquirer for more than 20 years, says that every time buyouts enter the picture, "they run off some of the best people. It's more humane than firing people, but only barely. Certainly it's not good for the institution, because you can't determine who they will keep and who they will lose."

For Some, a Sensible Choice

L. Stuart Ditzen, a civil courts reporter, says it wasn't long before he decided to take the offer this year: "I'm 61 years old and I'm going to be 62 in the middle of next year. It made sense for me to do this."

Ditzen has been with the paper for nearly 25 years -- and for most of that time he has been covering civil courts, a beat he came up with and sold to his editors 20 years ago. At that time, he recalls, "The horizon seemed endless. They were always open to new ideas and creative ideas. They had rich resources." Once he proved an idea for a story or project to his editors, they let him run with it.

Ditzen notes that criminal cases are easy to follow up, with police reports and other monitoring agents, but civil cases are different. Unless someone seeks them out, they slip by unnoticed. "There are interesting stories in the civil courts," Ditzen says. "The trick is to find them. That's been my game."

On the day Ditzen spoke with E&P, the Inquirer had published one of his stories on U.S. Supreme Court nominee Samuel Alito Jr. The article pointed to an allegation that Alito served as judge on a case involving "hundreds and thousands of dollars in mutual funds" where there was a clear conflict of interest. Ditzen had written the story two years ago, but when Alito was nominated to the bench, he recapped the article.

Ditzen applied for the buyout a week after it was on the table. He filled out the application and sent it back to HR, which then alerted management. About 10 days went by before he received the specifics of his package, including how much money he could expect. In all, the process took about three weeks.

Like other Inquirer staffers who were accepted, Ditzen had a week to change his mind and says he didn't feel any pressure, at least not from management: "I would feel a degree of guilt if I did not take the buyout if I would cost a young person their job. Three years ago we did a wave of hiring, and the paper desperately needed new blood. Potentially, they are in jeopardy." Now free to explore other options, Ditzen plans to keep writing and is considering a job offer as a private detective.

Tom Gibbons, 60, is another highly experienced reporter taking the buyout. "For me it was somewhat advantageous because I was expecting to retire in February of 2007," says the senior police reporter, who has been on the beat for his 24 years at the Inquirer. Gibbons took the package because it was lucrative and he wanted to go out at a marketable age: "There's a big difference between 60 and 62, and I fully intend on doing something. I don't know yet, but it's neat thinking about it."

Like Ditzen, he applied for the offer shortly after the announcement. In the first week of October he recalls receiving an e-mail informing him that his application had been accepted: "It raised my pulse -- that was a big day for me. I had huge mixed emotions. Am I doing the right thing? Am I making a mistake? It's a great business and a great company. I was near tears." Gibbons adds, "I'm not bitter at all. It's a big company, and it's a very good offer."

The Shuffle or the Deal

Though guild representatives are less involved in the buyout process, they do keep a close eye on management in case undue pressure is exerted on staffers to take the package. In the past, such a grievance might involve an editor hinting that a reporter's beat would change drastically. In the 2005 buyouts, Holcomb adds, there have been no clear cases of impropriety.

With the newsroom suffering such deep cuts, workers' duties will inevitably change, even if it's a subtle shift. "There are definitely going to be reassignments," says Tony Auth, a cartoonist who has been with the paper for 34 years.

Bennett says she's out to reassure her newsroom that management won't haphazardly shuffle reporters' beats: "Peoples' fear was, 'Oh my God, they're going to take me off my national security beat and I'm going to wind up doing sports writing.' That's ridiculous. When you go down people, what you have to do is make greater use off your skills and talents, not less. Why would I do that?"

Bob Martin, the Inquirer's Pennsylvania commentary editor, applied for the buyout and was approved in early November. Martin's decision to apply involved his age -- he's 59 -- and he believed he would get a fair offer. He's been with Knight Ridder for 23 years, 19 of which he has spent at the Inquirer. He works in the suburbs, and the cuts would change his job: If he stayed, he would have to work in downtown Philadelphia. He could still write editorials, but they would need him to work on the letters section.

Martin is very matter-of-fact about the situation. He feels he's been treated well, and he's sympathetic to the changes that soon will come to the newsroom. "Nobody put a gun to my head," he says. "I could have stayed if I wanted to." Martin adds that now is a good time for him to check out other opportunities outside the paper. He will continue to write, including the occasional bit for the Inquirer, teach journalism, and his other passion -- ballroom dancing.

National correspondent Nussbaum, who considered taking the buyout -- having two kids not yet in college made him think better of it -- believes his beat will remain intact. He travels across the country covering national trends and events, including the evangelical movement. Nussbaum says Bennett told the national desk she's not anticipating any dramatic adjustments, but he concedes it's too early to judge: "Nobody knows for sure what the paper is going to look like after the dust settles."

Staying on Course

The buyouts -- plus the fact that Knight Ridder is in danger of being put on the block -- have dampened many staffers' spirits. The possible sale of the company adds a new wrinkle. "Who do we listen to? Who do we trust?" asks metro columnist Yant Kinney. "We're reshaping a newspaper, but the people doing it may not be there," she says, echoing the fears of several staffers that the paper could be sold.

The Inquirer's vast and airy newsroom, with prep school banners marking different departments, was unusually quiet. It's hard to tell if that speaks of technology at work -- everyone communicating through e-mail, Holcomb suggests -- or a general pall.

Newsroom staffers are dejected, but they are not about to roll over; they fiercely guard the reputation of the paper and even its sister tab. During E&P's late-October visit, two reporters in the sports department were taking issue over a report in the alternative Philadelphia City Paper suggesting the Daily News is going to be laid to waste.

Even with the "distractions" of the buyouts, the paper has managed to scoop The New York Times (on its own story, when Judith Miller used her get-of-jail-free card), reported extensively on abuse by area Catholic priests, and published a lengthy Sunday series on domestic violence.

While turning out these stories, staffers also have been asked to come up with ideas on how to make the paper work through a series of brainstorming sessions. The Inquirer, which reaches eight counties, will take a regional approach organizing its coverage thematically.

"There is a great deal of consciousness of how important we are to the region," Bennett notes, adding that her newsroom takes that responsibility seriously. "Also, there is a great deal of sense of pride in doing things well."

Investigative Reporting Editor Joe Tanfani says of the buyouts, "It's defeatist to say that whacking 15% of the staff we have to take down a flag. It's our duty to keep going. I don't like the narrative that once the cutbacks happen it's all over." He says his department will remain intact.

Bennett understands what the newsroom is going through after five months of uncertainty. "They are quitting in their heads like five times a day," she observes. "But I can see now, I can see that it's going to be OK. They don't see it yet, but I can see it."