Newspapers keep cutting costs, print editions

SAN FRANCISCO — The Oregonian in Portland is reducing employee wages by up to 10 percent and requiring full-time workers to take four unpaid days off between May and September as its publisher tries to reverse a 2008 operating loss of more than $10 million.

The pall looming over U.S. newspapers grew even darker Monday as Gannett Co. informed most of its employees that they will have to take another week of unpaid leave this spring, while a Michigan daily unveiled plans to close its print edition after 174 years.

And The Plain Dealer, Ohio's largest newspaper, also ordered pay cuts of 8 percent and 10-day furloughs for nonunion employees Monday to cut costs as advertising revenue drops.

The moves were just the latest sign of the distress afflicting newspapers across the country as they try to cope with a dramatic shift in advertising that is forcing publishers to figure out how to survive with substantially less revenue.

Signaling it doesn't see an upturn anytime soon, Gannett wants virtually all of its U.S. employees to stay at home and forgo at least one week's pay before July. About 6,600 workers outside the United States won't be affected by the furloughs.

Executives and many workers making more than $90,000 annually will sacrifice two weeks pay in hopes that Gannett — the owner of USA Today and more than 80 daily newspapers — will be able to avoid more layoffs after jettisoning 4,000 jobs last year.

This will mark Gannett's second round of furloughs this year. The company, which employs about 41,500 people, saved about $20 million by imposing one-week furloughs during the first three months of this year.

"We are about to begin the second quarter without any real relief in sight from this unprecedented economic downturn and its challenge to our company," Gannett Chief Executive Craig Dubow wrote in a staff memo. "Despite all of your truly remarkable efforts to reverse the trend, our revenue numbers continue their downward slide and we have been faced with more difficult decisions."

Based on his annual salary of $1 million, Dubow will lose more than $38,000 of his pay in the second quarter.

The Star-Ledger of Newark, New Jersey, owned by the Newhouse family's Advance Publications, also told its 530 full-time workers they will have to make a similar sacrifice by taking 10 unpaid days off this year.

Other newspapers are simply concluding that daily editions no longer make financial sense in some markets.

That's why privately held Advance Publications plans to replace The Ann Arbor News with an online-focused operation that will publish only on Thursdays and Sundays beginning in July. The publisher is betting a more Web-centric newspaper will thrive in Ann Arbor, a college town that has a more tech-savvy population than many other parts of Michigan.

Without providing specifics, The Ann Arbor News' management warned that the shift from print will trigger significant job cuts. The newspaper, which has an average weekday circulation of about 45,000, currently employs 272 employees.

The transformation of the News was the most significant of the cost-cutting measures announced at Advance Publications' eight daily Michigan newspapers.

The Flint Journal, The Bay City Times and The Saginaw News will go from daily publication to three days a week — Thursdays, Fridays and Sundays — starting June 1. It's similar to a move that the Detroit Free Press and The Detroit News will make next week when they curtail the home delivery schedule for their print editions to the same three days.

Meanwhile, the Lexington (Kentucky) Herald-Leader and The Charlotte (North Carolina) Observer separately disclosed plans to lay off more than 130 employees between them. The purge is part of 1,600 job cuts disclosed earlier by the newspapers' owner, McClatchy Co.

Like most businesses, newspapers have been hard hit by the deepest recession since the early 1980s. But the blow has been especially devastating for newspapers because they were already losing readers and revenue to the Internet, where news can be easily found for free and the advertising rates are substantially lower.

The Internet's allure, coupled with the punishing recession, have caused annual advertising revenue to shrivel by 20 percent to 30 percent at some newspaper publishers since 2006.

The double whammy resulted in the closure of the 149-year-old Rocky Mountain News in Denver last month and prompted the Seattle Post-Intelligencer to go online-only last week.