The Bee offered voluntary buyouts to the majority of its full-time employees today and hinted that another round of layoffs is possible as well.
The buyouts represent the latest round of cost cutting at The Bee, which is facing a big slump in advertising revenue. Two months ago the newspaper eliminated 86 jobs as part of an across-the-board layoff ordered by its parent, The McClatchy Co. of Sacramento. McClatchy imposed a companywide wage freeze two weeks ago.
But Bee executives said today they needed to make more cuts. The economic downturn has deepened and The Bee, like the rest of the newspaper industry, continues to struggle with the migration of business to the Internet and other media.
"It's about continually looking at your work force and looking at your economic projections and trying to bring those in line," Bee Publisher and President Cheryl Dell said. "We thought that we had that two months ago, but with the worsening economy, we just need to do more."
She added that bankruptcies of several advertisers, including Room Source, Linens N Things and Mervyns, has contributed to the uncertainty.
Dell said another round of layoffs is possible if there aren't enough voluntary buyouts. But she said it was "premature to establish a target or quota" for the buyouts. The buyouts were offered to 55 percent of the paper's full-time employees and a smaller number of part-timers, she said. About 44 percent of all employees are being offered buyouts.
The buyout program was announced just a few weeks after The Bee unveiled a redesigned, smaller format for its printed paper, another move largely aimed at cutting costs.
The Bee became the fifth McClatchy paper to offer buyouts to most full-timers this month, including the Modesto Bee, Lexington (Ky.) Herald-Leader, Fort Worth Star-Telegram and the Fresno Bee.
The Sacramento paper has undertaken limited buyout programs in the past, but this represents the first broad-based buyouts in its history. Dell said employees were generally offered two weeks' pay for every year worked at The Bee, up to 40 weeks.
Layoffs, buyouts and other cutbacks have become almost routine across the industry; recently, the nation's largest newspaper publisher, Gannett Co. Inc., said it was eliminating 1,000 jobs in its newspaper division. Atlanta-based Cox Enterprises Inc. put all but three of its newspapers up for sale. The (Portland) Oregonian announced its own buyout program.
At The Bee, Melanie Sill, the paper's editor and senior vice president, said buyouts were offered to about 200 of the 240 full-time equivalent staffers in the news and editorial-page departments. She said the new round of reductions will force the paper to focus intensely on "the most important areas of coverage.
"Obviously, you can do more if you have more people," she said. "Our approach through this whole period of downsizing has been to prioritize...and we'll continue to do that."
The paper could reject some of the buyout applications if too many employees make a request, Dell said.
McClatchy, the third largest U.S. newspaper chain, is suffering more than most publishers because of its heavy concentration in California and Florida. Those states generate one third of the company's ad revenue and are among the hardest hit by the housing market crash.
Ad revenue is down more than 22 percent this year at McClatchy's papers in California and Florida, compared to 16.5 percent for the whole company. McClatchy's total revenue, including circulation sales, is down 15 percent.
One ray of hope at The Bee, Dell said, is that the Sacramento area entered the downturn earlier than most markets "and there's a general belief that we'll come out of this earlier."
The parent company is further burdened by slightly more than $2 billion in debt left over from its 2006 takeover of the Knight Ridder Inc. chain. As its profits keep shrinking, McClatchy officials said a month ago that they're considering lowering the company's quarterly dividend payout to shareholders.
The company's stock has fallen 85 percent in the past year. Today it was down 11 cents to $3.47 in morning trading on the New York Stock Exchange.
Through the first half of this year, McClatchy's profits have fallen by more than half, to $18.2 million from $44.3 million a year earlier.
In June McClatchy imposed its first-ever mass layoffs, a move that resulted in a 10 percent cutback in personnel and is expected to yield $70 million in annual savings.
The Bee terminated 8.1 percent of its approximately 1,000 employees. About half were laid off, and the rest of the cuts came through buyouts and attrition.
Call The Bee's Dale Kasler, (916) 321-1066.
