http://www.fresnobee.com/updates/story/1248784.html
McClatchy to cut 1,600 jobs nationwide
Monday, Mar. 09, 2009
The Sacramento Bee
Sacramento-based newspaper publisher The
McClatchy Co. said today it is cutting 1,600 jobs across the country,
or about 15% of its workforce. McClatchy, which owns The Fresno Bee and 29
other daily
newspapers, said Chairman and Chief Executive Gary Pruitt will take a
15% cut in base salary this year. Other executives are taking 10% pay
cuts, and there will be "wage reductions across the company for
additional savings," the company said. Also today, The
Sacramento Bee announced it is eliminating 128 jobs, or 11% of its
workforce, and will impose pay cuts on remaining workers.
The Sacramento Bee's news division is losing 29 union and non-union
workers, or nearly 13%. Eight jobs in advertising will be lost, along
with dozens more in production, circulation and other departments.
Wages will be reduced by up to 6% depending on the individual's salary,
effective April 13. Bee employees might also be required to take
one-week unpaid furloughs later this year.
Today's rollbacks are the third -- and most severe -- at McClatchy
since the company announced its first mass layoffs in history last
June. The cutbacks go beyond the $100 million to $110 million announced
last month as the chain tries to cope with an accelerating drop-off in
profits and revenue. McClatchy Treasurer Elaine Lintecum wouldn't
provide new dollar figures.
McClatchy's cutbacks now total 4,150, or about 35%.McClatchy
and other media companies are suffering through a deep downturn in
profits and revenue. The Rocky Mountain News, one of two dailies in
Denver, folded late last month, while Hearst Corp. is moving to end the
printed version of the Seattle Post-Intelligencer and is threatening to
close or sell the unprofitable San Francisco Chronicle.
McClatchy remains profitable but, with its heavy concentration of
newspapers in California and Florida, has been particularly hard hit by
the collapse of the real estate market and a crippling slump in ad
revenue. "The
effects of the current national economic downturn make it essential
that we move even faster to realign our workforce and make our
operations more efficient," Pruitt said in a news release. "We
previously discussed a plan to reach a targeted level of cost savings,
but given the worsening economy, we must do more." He said the cutbacks
"while painful ... are working." Edward Atorino, an
analyst with The Benchmark Co. of New York, said the latest cutbacks
are needed. "It's working, in that they're staying ahead of the
sheriff, so to speak," he said. But he said the company can't keep cutting
indefinitely. "The rate of decline in revenue has got to slow down," he said.
John
Morton, head of Morton Research Inc. in Maryland, said the elimination
of jobs "really imperils the long-term future" of McClatchy because it
could hinder the company's ability to report the news. Company
executives say they have taken every possible step to minimize the
impact on news gathering. McClatchy's operating income
fell in half last year as revenue fell 16%. The company is straining
under $2 billion in debt left from its purchase of Knight Ridder Inc.
Although it says it's not in danger of missing debt payments, it had to
renegotiate its bank loans last fall to buy some breathing room. "What drives
this for McClatchy, more than anything else, is their debt obligation," Morton
said. The
company's credit rating is deep in speculative, or junk-bond,
territory, and one rating agency, Standard & Poor's, predicts
McClatchy will technically default on its bank agreements later this
year by failing to maintain minimum profitability. Even if the company
is current on its payment, a technical default would permit the banks
to take legal action and possibly force the company into Chapter 11
bankruptcy protection, Atorino said. The company has said
it won't go into default. Four newspaper companies have filed for
Chapter 11 since December. They include giant Tribune Co. of Chicago,
whose operations include the Los Angeles Times and Sacramento's Fox 40
television station. Pruitt earned a base salary of $1.1
million in 2008, according to Securities and Exchange Commission
filings. He received no bonus last year, the company said, although he
may have received other forms of compensation. A final accounting of
his 2008 compensation won't be available until March 31. McClatchy
also announced that fees paid to members of the board of directors will
be cut 13%. Its 14 "outside" or non-employee board members were paid
$45,000 to $83,000 each in 2007 and also received awards of stock.
Their fees for 2008 aren't yet available. The latest round of layoffs will cost
McClatchy about $30 million in severance costs. As
announced earlier, the company is also eliminating its shareholder
dividend and cutting retirement expenses by freezing its pension plan
and suspending contributions to its 401(k) plan. McClatchy stock was at 45
cents, in morning trading on the New York Stock Exchange, down 14 cents.
--~--~---------~--~----~------------~-------~--~----~
You received this message because you are subscribed to the Google Groups
"World News Now Discussion List" group.
To post to this group, send email to [email protected]
To unsubscribe from this group, send email to [email protected]
For more options, visit this group at http://groups.google.com/group/wnndl?hl=en
-~----------~----~----~----~------~----~------~--~---
