The Bee said Friday it plans to lay off at least 34 more employees and impose wage cuts as it struggles with a severe downturn in business.
The announcement affects those employees represented by the California Media Workers Guild, which represents about 250 news and advertising employees.
Additional employees not covered by the Guild will also face layoffs and other cost reductions, although Publisher and President Cheryl Dell said she doesn't know how deep those cuts will be. They will be announced later.
The rollbacks are part of a previously announced cost-cutting drive affecting every newspaper owned by The McClatchy Co. The Sacramento-based publisher, hurt by a free fall in profits and revenue, is cutting annual operating expenses by $100 million to $110 million. It's the third major cutback since June.
The previous cutbacks eliminated 170 Bee jobs and about 2,400 jobs across McClatchy newspapers nationwide.
Among The Bee's Guild employees, the number of layoffs will depend on whether union members accept a cost-cutting plan that will trim wages by up to 6 percent, depending on the individual's salary. Under the plan, The Bee also could impose unpaid one-week furloughs later this year. The wage cuts would take effect in April.
The Guild represents about 20 percent of The Bee's work force.
Although a tentative agreement was reached Friday evening, the union's leadership hasn't decided whether to recommend the plan to membership, said union representative Linda Frediani.
The vote is set for Friday. If the union rejects the plan, the number of layoffs among Guild employees will grow to 53, according to a memo sent to employees.
The Guild said the newsroom would lose 26 to 37 jobs represented by the union, depending on the vote. Non-Guild newsroom employees also could face layoffs. The news and interactive division employs about 225 workers.
"These are very difficult times," Dell said. "We need to adjust our operations to the revenues that we have."
As the economy has worsened, McClatchy's operating profit fell by half last year, to $55 million, amid a 16 percent drop in revenue. The company's $2 billion debt load has created additional pressure to cut costs, the company says. Although it says it's not in danger of missing debt payments, its margin for error has shrunk and it had to renegotiate its bank loans to provide breathing room.
The company also has eliminated its shareholder dividend, frozen its pension plan and halted contributions to employees' 401(k) plans.
McClatchy stock closed at 49 cents Friday, down 3 cents, on the New York Stock Exchange.
As the industry's struggles have worsened, four newspaper owners have filed for Chapter 11 bankruptcy protection in recent months. One of Denver's two dailies, the Rocky Mountain News, folded Friday. Hearst Corp. is threatening to close or sell the unprofitable San Francisco Chronicle and Seattle Post-Intelligencer.
Call The Bee's Dale Kasler at (916) 321-1066. Read his blog on the economy, Home Front, at www.sacbee.com/blogs.
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