A.H. Belo Corp. will lay off approximately 500 employees at The Dallas Morning News and its three other dailies, CEO Robert Decherd told employees in a memo that said pay cuts and the newly popular industry practice of furloughs had been considered and rejected by management.
The staff reduction, amounting to nearly 14 percent of employees, is the second big round of job cuts in the past six months. Last summer, A.H. Belo reduced about 500 jobs nationwide with voluntary severance packages followed by layoffs.
“The revenue trends we continue to experience simply do not support or require the same number of people as we have previously employed,” Decherd said. “This reduction in force will impact all of the operating companies and corporate, and will probably be in the range of 500 jobs. Specifics about the reduction in force plan will be communicated as soon as possible, but no later than mid-February.”
Decherd’s memo reveals that the pure-play newspaper company that was spun out from Belo’s television business last year is paying some operating costs with its bank credit line — which will be further pressured now that new severance costs are coming.
“All of you have read about approaches that peer newspaper companies have taken to meet these same challenges, including furloughs and across-the-board pay cuts,” Decherd said. “The Management Committee believes that such actions are not best for A. H. Belo at this time, yet we recognize that all means of preserving cash need to be explored. I assure you that we are considering any and all opportunities to improve the company’s revenues and preserve cash internally, and every idea is welcome.”
Those surviving the layoffs will feel the pain of the company’s financial squeeze in big and little ways, ranging from the suspension of matching contributions to employee 401(k) retirement plans — to charging for parking at the Dallas flagship.
“It is no longer reasonable for the company to provide free parking in downtown Dallas,” Decherd wrote.
Staring in May, employees will be charged $40 a month to park in outdoor lots owned by the company. Those parking in the garage of The Belo Building will find their monthly charged bumped from $40 per month to $70 per month. The fees will generate about $520,000 a year, Decherd said.
Similarly, the monthly reimbursement for wireless devices paid some employees will be “substantially” reduced to $35, saving $200,000 annually, he said.
And suspending the A. H. Belo Savings Plan match for 2009, beginning in April, “will preserve almost $5.5 million in cash on an annual basis and enable us to limit the reduction in force as well as preserve important news content,” he said.
“The decline in advertising revenues for the newspaper industry and all media persists,” Decherd said. “This has led to a seemingly endless number of announcements from our peer newspaper publishers and other media companies describing initiatives that respond to such fast-changing business conditions. The key for all companies, and certainly for A. H. Belo, is to generate and preserve cash.”