The McClatchy Co. announced this afternoon it plans to reduce its workforce by 10 percent or approximately 1,150 full time positions. Meanwhile, the company said that advertising revenue declined 17.8 percent in August compared to the same period a year ago.
Half of the staff reductions are coming through voluntary programs and attrition, according to a statement. McClatchy is expected to save $100 million over the next four quarters, excluding $20 million in severance costs, from the move.
"It is painful to announce these staff reductions, but the continued restructuring of our company is necessary given the relentless economic downturn and its impact on our business," McClatchy Chairman and CEO Gary Pruitt said in a release. "But it is also part of a strategic vision of becoming a hybrid print and online media company. McClatchy is committed to remaining a healthy, profitable company positioned to meet current challenges."
This amounts to an estimated 1150 jobs and follows other steep cuts earlier this year.
Additionally, the McClatchy board declared a third quarter dividend of 9 cents per share--half of what it paid out to shareholders in Q2. The company plans to use the extra cash to pay down debt. "We believe this action is in the best interest of our equity and debt investors," Pruitt said in a statement.
The company's August advertising results were weighed down by losses in all major categories. Combined print and online, retail advertising decreased 8.4 percent. National dropped 20.2 percent. Classified plunged almost 30 percent. Within the classified category, employment was down 41.4 percent, auto was down 21.5 percent, and real estate was down 38.7 percent.
Total online advertising revenue rose 7.4 percent to $14.8 million on losses of online recruitment advertising, which was down 32.7 percent. All other online categories recorded double-digit growth.
McClatchy's release stated that "roughly half of the staff reductions are coming through voluntary programs and managed attrition. The company expects to achieve savings of $100 million over the next four quarters, excluding severance costs of approximately $20 million, from the staff reductions along with other savings initiatives. This represents a savings of more than 6 percent of total cash expenses based on cash expenses over the last 12 months.
"The company is actively working to sustain editorial quality and meet its public service journalism obligations despite some staff reductions. Innovative sharing and staffing changes like the combining of sports and political reporting staffs from Raleigh and Charlotte N.C. will extend the reach and depth of reporting despite overall staff reductions, and similarly innovative plans tailored to specific regions and newspapers are in play across the company. Shared editing and design duties enabled by upgraded technology also will be introduced."