Tribune Co. Will Cut Up to 500 Jobs

By: Joe Strupp The Tribune Company is planning to cut up to 500 people, about 2% of its nationwide workforce -- including some 100 to 150 jobs at the Los Angeles Times, according to a story posted on the Times Web site today.

The story described the action by new chief executive Sam Zell as a necessity while the company is "struggling with declining revenue," Times Publisher David Hiller said in an interview with his paper. The cuts would mean 40 to 50 job loses in his newsroom "through a combination of attrition, voluntary buyouts and, if necessary, layoffs."

Zell announced the news this morning in one of his frequent 'Talk to Sam' e-mails to all employees, the paper reported: "The job cuts are focused on the corporate staff and the company's nine newspapers, including, besides The Times, the Chicago Tribune, Newsday in New York, the Orlando Sentinel, the Baltimore Sun and the Hartford Courant.

"The decision was reached during meetings Monday and Tuesday among senior executives at Tribune's Chicago headquarters," the paper said.

The cuts would apparently not affect Tribune's broadcast division, consisting of nearly two dozen television stations. Hiller told the Times that all of the people affected "would be out of the company by the end of March."

Similar to previous buyouts and layoffs at the Times, most departing employees will receive two weeks' pay per year of service. But, the report noted, "Hiller said that any buyouts next year would involve far smaller severance packages -- probably one week's pay per year of service. ... Anyone who's been thinking about taking advantage of such a program might want to think seriously about this one."

The Times also reported that "the cash to finance the buyouts will come from the over-funded portion of Tribune employees' cash-balance pension plan. Hiller said that Tribune officials have determined that the defined-benefit plan has about $300 million more than it needs to meet future obligations to retirees.

"Rather than leave that cash 'just sitting there,' Hiller said, Zell is making use of it to fund the buyouts and -- in a program he announced Tuesday -- to make a one-time, cash contribution of 2% of employees' salaries to a new cash-balance plan early this year. Zell said the money would help compensate workers for the annual profit-sharing contribution that Tribune traditionally had made to their pension accounts. Zell said that Tribune's former executives had made the decision to eliminate the profit-sharing contribution for 2007 but left it to him to convey the bad news."

Zell, as part of an employee stock ownership plan, or ESOP, led the $8.2-billion buyout of Tribune that was completed in December.

Related:

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