Things don't always go the way you planned. You do well in school, get a good job writing for a leading newspaper, and hope you'll have a comfortable and interesting career. Then along comes the internet, which scoops up your advertising revenue while giving away your reported content for free. You find yourself working in an industry that loses money and you are faced with two options: take a pay cut or lose your job.
That's the world of Boston Globe reporters in a nutshell. They work for an outfit that's expected to lose $85 million this year and whose parent company demanded $10 million in cost cuts so it can sell the Globe to someone looking for a trophy to brag about at the country club. Unfortunately, there is nothing that the Globe's owner can do to make it an attractive business.
When you have a mortgage and college tuitions to pay, you end up taking the pay cut instead of the job loss -- although that might come later. Last night, the Globe's 700 Newspaper Guild members voted 366 to 179 to approve a package of pay cuts, furloughs, and unpaid vacation that reduce earnings by about nine percent; and steep cuts in health and retirement benefits, including a pension freeze; and elimination of lifetime job guarantees for about 170 veteran employees.
But this package is better than what the reporters had to live with for the last month. That's because the Guild rejected a package in June involving an 8.4 percent pay cut -- and that rejection enabled the Globe's parent company to impose an immediate 23 percent pay cut. It is now clear that the Guild would have been better off accepting that June deal.
Unfortunately for the Globe, things will keep getting worse -- that is unless it gives up the idea of producing a money-losing dead-tree version of its content every day. Reporters are wishing on two stars which only exist in their imagination -- the first one is that the economy will start growing again -- bringing with it an uptick in local newspaper advertising -- and the second is that when the economy returns, advertising dollars will flow back to newspapers.
In the real world, such fantasies will continue to remain out of reach. And those reporters will soon face the same choice again -- a pay cut or unemployment.
Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College. His eighth book is You Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing.