Media Biz: Layoffs at NY Times, Washington Post are not a surprise
Newspapers were struggling before the economy slowed down and now that the recession has arrived they are in a death spiral. The Newspaper Association of America estimates total revenue will fall 5.5 percent this year, down from a drop of 11.5 percent last year. Some of the biggest and most well-respected papers, including The Philadelphia Inquirer, The Orange County Register and the Houston Chronicle, have seen circulation fall by 10 percent or more. In the fourth quarter, Gannett Co., the largest newspaper publisher, reported a 22.7 percent decline in advertising revenue.Neither The New York Times (NYT) nor The Washington Post (WPO) has been immune to the industry's woes. Advertising revenue at the Times' parent company, whose properties include the Boston Globe, fell 15.7 percent in December. The Post, which gets most of its earnings from its Kaplan education division, reported an operating loss of
Both companies have already cut jobs, so further staff reductions are not surprising. Even the Newspaper Association of America noted, "it is unlikely that advertising spending in newspapers will improve in 2009, even if the recession is deemed over by midyear."
At the Times, 100 workers were laid off and salaries of non-union workers through the end of the year were cut 5% in exchange for 10 days leave. The publisher will ask unionized workers to accept similar conditions to avoid newsroom layoffs. "The odds are going up" that the temporary pay cuts will become permanent, according to Edward Atorino, an analyst with Benchmark Co., who follows the industry.
The Post today offered a new round of buyouts to newsroom, production and circulation employees. Publisher Katharine Weymouth declined to tell Reuters how many employees the paper wants to leave. She wouldn't rule out future layoffs.
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