McClatchy cutting 1,600 additional jobs

by Associated Press

McClatchy Co. is shearing an additional 1,600 jobs in a cost-cutting spree that has clipped nearly one-third of the newspaper publisher's work force in less than a year.

The latest reduction in payroll announced Monday follows through on the Sacramento, Calif.-based company's previously disclosed plans to lower its expenses by as much as $110 million over the next year as its revenue evaporates amid a devastating recession. The layoffs will start before April. Several of McClatchy's 30 daily newspapers, including The Sacramento Bee and The Kansas City (Mo.) Star, already have decided how many workers will be shown the door.

After the latest purge, McClatchy will have saved at least $300 million annually, with management now confident it will exceed the $110 million target set for the latest cuts, although the company didn't specify by how much.

The savings are accumulating mostly through the elimination of 4,150 jobs, or more than 30 percent of McClatchy's work force, since June. The company will end up with the equivalent of about 9,200 full-time workers.

Paying severance and other benefits in the latest round of layoffs will cost McClatchy $30 million.

Besides jettisoning jobs, McClatchy is also lowering the wages of many employees, including its chief executive, Gary Pruitt, whose salary is being trimmed 15 percent. Labor leaders representing workers at The Sacramento Bee had sought an even bigger reduction that would have capped Pruitt's salary at $500,000 this year. Pruitt received a $1.1 million salary in 2007, the most recent year his pay has been disclosed.

"I'm sorry we have to take these actions, but we believe they are necessary," Pruitt said.

The downturn in McClatchy's fortunes has been compounded by about $2 billion in debt, most of which was taken on to finance the company's $4.6 billion acquisition of Knight Ridder Inc. in June 2006.

The newspaper industry began to suffer from declining ad revenue about the time that deal was completed. Classified ads have shifted to the Internet in recent years, and the recession has been siphoning away more revenue in all ad categories since last summer.

Investors have largely abandoned the company's stock. The shares declined 18 cents Tuesday to close at just 41 cents. The stock has plummeted by nearly $40 since the Knight Ridder acquisition was completed.

McClatchy's nationwide holdings include four Washington State newspapers: the Olympian, the Tacoma News-Tribune, the Bellingham Herald and the Tri-City Herald.

article originally published at http://cbs5.com/local/mcclatchy.job.cuts.2.954630.html.

The media's job is to interest the public in the public interest. -John Dewey