By paulgillin | June 17, 2008 - 7:03 am - Posted in Facebook

McClatchy Co., the country’s third-largest newspaper publisher, will axe 10% of its workforce as it struggles with a crushing debt load and advertising declines that are outpacing industry averages. The publisher of 30 newspapers, with a heavy concentration in the south, will cut 1,400 positions across its portfolio. The move comes after McClatchy reported a stunning 16.6% advertising decline in May and a 15.4% drop in the first five months of the year.

McClatchy is suffering more than most newspaper publishers because of the real estate crash in the southeast. And the southeast took the brunt of the blows. Hardest hit is the Miami Herald, which will lose 250 jobs, or 17% of its workforce. Revenue at McClatchy’s Florida operations fell 20.4% in the first quarter, with print-only revenue declining 23%. Online ad revenue in Florida increased just 7%. The Kansas City Star was another big loser. It will shed 120 positions, or 10% of its staff. That includes 22 newsroom employees out of a staff of 285. The Fort Worth Star-Telegram will also lose 10% of its staff, or 130 people.

North Carolina was also slammed. The Charlotte Observer is cutting 123 people, including 22 newsroom employees. The Raleigh News & Observer will axe 70 positions. The two papers will also merge their capital bureaus, sports staffs and research departments and produce more joint features. Here’s North Carolina coverage from the Observer, Charleston Post and Courier and Myrtle Beach Sun News.

Over 100 jobs will be cut in Washington state. The Tacoma News Tribune will lose 84 positions, or 13% of its staff. The Olympian will cut 17 positions, or 9% of its staff. The Bellingham Herald is cutting 13 employees, or 10% of its staff. The Tri-City Herald is losing nine people. The Anchorage Daily News is also losing 35 positions. The Seattle Times, which cut 200 jobs in April, isn’t affected. McClatchy will also outsource the printing of The Bellingham Herald and the (Boise) Idaho Statesman to Seattle-based Pioneer Newspapers.

McClatchy said the number of layoffs is being matched to local business conditions and that a few papers won’t suffer any cutbacks at all.

These are the first across-the-board layoffs at McClatchy, which has cut head count by 13% over the last two years using a combination of buyouts and attrition. The publisher said the cuts would save about $70 million a year. McClatchy CEO Gary Pruitt, who received an $800,000 performance bonus last year while the company stock dropped 70%, said he hoped further cuts wouldn’t be necessary, but he wouldn’t commit to anything. “I’m hopeful that it doesn’t get worse, but I can’t say for sure,” he said.

Alan Mutter says that despite the scope of the McClatchy cuts, they aren’t nearly enough. He forecasts a $295 drop in McClatchy revenues in 2008, meaning that the layoffs will make up less than a quarter of the difference. With a debt load exceeding $4 billion from its 2006 purchase of Knight Ridder, the company badly needs to improve cash flow.



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Comments Off on McClatchy's Bloody Monday


  1. June 25, 2008 @ 11:28 am

    I am an employee layed off by McClatchy. I don’t understand why the cuts are needed when the CEO received such a large bonus. And what about the Operating Committee? They themselves enjoy a bonus while the rest of us wonder if we will still have a job. Give up the brass. We would all be better off.

    Posted by Dana
  2. July 14, 2008 @ 8:45 am

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