SACRAMENTO, Calif. — The McClatchy Co., battered by declining profits and revenue, announced a 10 percent companywide cut in its work force Monday, including the Sacramento, Calif., publisher’s first-ever across-the-board layoffs.
The decision will eliminate 1,400 jobs through a combination of layoffs, voluntary departures and attrition.McClatchy, publisher of the Centre Daily Times and 30 other newspapers, has prided itself on avoiding across-the-board layoffs even as it has used buyouts and attrition to cut its head count by 13 percent since April 2006. But with the company struggling and its stock price down about 80 percent in two years, McClatchy said it had to act more decisively to reduce costs as it transitions to a company more fully focused on the Internet. In a separate announcement, McClatchy said its May revenue fell 15.1 percent; ad sales fell 16.6 percent.
“The effects of the current national economic downturn — particularly in real estate, auto and employment advertising — make it essential that we move faster now to realign our work force and make our operations more efficient,” Chairman and CEO Gary Pruitt said in a prepared statement. “I’m sorry this requires the painful announcement we are making today, but we’re taking this action to help ensure a healthy future for our company.”
The job cuts include the elimination of three positions at the CDT out of a staff of 133. “It’s a very, very difficult and painful decision,” said Publisher Adrian Pratt, “but one that, with the reality of the industry, we had to make.”
The affected employees found out Monday morning and will receive severance pay and a continuation of their benefits. “Our intention and our focus will continue to be on good public journalism and putting out a great local newspaper,” Pratt said.
Monday’s announcement could test McClatchy’s reputation as a publisher that can balance quality journalism with the incessant demands of Wall Street. Until now, it has been one of the few publishers to hold to a policy of no broad layoffs, although many of its papers have eliminated jobs through buyouts and attrition.
“McClatchy is still viewed as a newspaper company that cares about quality,“ said John Morton, an independent industry analyst and consultant in Maryland. The cutback ”puts a dent in that, but it’s not a deep slash,” he said. Quite a few other newspaper chains have been making deep cuts aimed primarily at newsrooms, he said.
The job cuts are designed to save McClatchy about $70 million a year, as part of a larger plan to reduce total operating costs by $95 million to $100 million a year.
Pruitt, in the statement, said the cutbacks are “part of a continuing, strategic vision for successful future operations, not solely a response to today’s adverse conditions.” He said the company is positioning itself “to take full advantage of opportunities for growth as we restructure to support our mission of delivering high-quality news and information.” McClatchy, like other publishers, has been ramping up its online operations, and Web ad revenue has grown 12 percent this year. The Web now accounts for about 11 percent of McClatchy’s ad revenue.
McClatchy is the third largest newspaper chain in the country. The cutbacks vary from paper to paper: The Sacramento Bee is cutting 8.1 percent of its staff, the Miami Herald is eliminating 17 percent of its jobs and the Charlotte Observer is trimming 11 percent.
CDT staff writer Anne Danahy contributed to this story.