The New York Times Chooses Strange Timing to Announce Staff Cuts

The New York Times Co. (NYT) is set to announce quarterly earnings later this week. Monday, bad news came early and by surprise.

With a need for greater cost reductions, the Times announced a plan to cut 100 newsroom jobs (8% of total) by year end. This comes on top of budget cuts and a 5% employee pay cut already in place.

The Times is approaching the process with a buyout offer. Employees will receive detailed information packets and have forty five days to decide whether or not to apply. The buyouts are expected to offer between two and three weeks of salary per year of employment. If there aren’t enough volunteers, the company will implement layoffs to reach the quota.

Earlier this year, Times executives said they didn’t anticipate further newsroom cuts in 2009. That they changed their minds isn’t surprising given the current ad market and the struggles of the print industry. Newspapers are fighting an increasingly competitive online global arena and it’s clear there is no easy answer for how to succeed. There’s so much information beamed at audiences. To stand out from the volume (below cost and consistently) is a difficult task.

What is odd about the Times’ news is the timing. Delivering bad news days before earnings… the foreshadowing doesn’t look good.

Executive Editor Bill Keller acknowledged in a letter to the company’s staff, “I doubt that anyone is shocked by the fact of this, but it is happening sooner than anyone anticipated. When we took our five percent pay cuts, it was in the hope that this would fend off the need for more staff cuts this year. But I accept that if it’s going to happen, it should be done quickly.”

The classic “pull off the band-aid quick” logic may not be explanation enough for the market.

The Times has a bigger newsroom staff than any other US paper. Even with the cuts, it will still be the largest.

Comments

[doubleguns:]

The times reputation (or lack of it) is a big part of why they are in financial trouble.

Oct 20 09:08 AM

[Swashbuckler:]

I will be crushed if the NYT does not make it through this crisis. They have for years been my favorite source for plagiarized articles and deliberate lies masquerading as news. Oh well, I guess if worse comes to worse, I can always rely on the fiction section of my local library.

Oct 20 10:39 AM

[Albertarocks:]

On Oct 20 10:39 AM Swashbuckler wrote:

> I will be crushed if the NYT does not make it through this crisis.
> They have for years been my favorite source for plagiarized articles
> and deliberate lies masquerading as news. Oh well, I guess if worse
> comes to worse, I can always rely on the fiction section of my local
> library.<

Swash, next time you're out to buy a copy, pick up some puts as well. That way you win both ways :-)

Oct 20 10:50 AM

[Drew Boyd:]

Newspapers CAN be reinvented by innovating the individual components of their business model rather than tackling the whole model itself:

www.innovationinpracti...

The NYT is well-positioned to start the experiment.

Oct 20 01:06 PM

[Jimbo:]

One reason for the decline of both electronic and print media is massive intellectual dishonesty.

Oct 20 03:13 PM