Hammer hangs over LAT staff **

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Five Pulitzers or no, Tribune Publishing president Jack Fuller just threw a pall over the newsroom at the L.A. Times. While rumors swirl about 60 impending editorial department layoffs (and 120 overall), Fuller's note to employees avoided specifics:

From: Corporate-Relations [Notes]
Sent: Monday, June 07, 2004 1:39 PM
Subject: Message from Jack Fuller/Cost-Saving Initiatives
Dear Fellow Employee,

Today we released our summary of revenues for May and announced that we are reducing expenses across the publishing group through a series of cost saving initiatives. We're taking this action because revenue growth at some of our newspapers has not materialized as fast as we had originally planned. While the help-wanted advertising category continues to improve and preprint advertising is growing, other advertising categories at some of our newspapers are experiencing difficulties. The problem is limited to a few newspapers, including the Los Angeles Times.

Failing to react to the revenue shortfall in publishing would cause a drag on the earnings of Tribune Company as a whole. By implementing expense control initiatives immediately, we can avoid that. Additionally, next year we expect to face continued expense pressure due to pension and retirement costs and a possible increase in the price of newsprint. The cost saving measures we implement now will help us deal with these 2005 issues, as well.

Implementation of expense control initiatives is being determined by each individual business unit and may consist of both staff reductions and other cost saving measures.

Sincerely,
Jack

* Add: Revenues at Tribune papers are actually up 3.2% to $467 million, Fuller reported to Wall Street today. But the release states: "Slower than anticipated growth within the publishing group will be offset by expense reductions. Actions being taken include staff reductions, newsprint conservation programs and reduced spending levels in all departments." Tribune alerted Wall Street it will take a $10 to $15 million charge in the second quarter for the cost-saving moves. It should be noted, Fuller mentions only one paper in the release to investors: "The shortfall is limited to a few newspapers, including the Los Angeles Times."

** Buyouts before layoffs: Staff reductions may first come through voluntary buyouts in which newsroom employees are offered cash, based on years of service, as an inducement to leave. It's happened before: in fact, several longtime employees still rue rejecting an offer of two years' salary several years back. Subsequent buyouts were nowhere near as lucrative. The following memo to the Washington Bureau by Bureau Chief Doyle McManus updates the situation:

From: McManus, Doyle
Sent: Monday, June 07, 2004 6:24 PM
Subject:Buy-out offer coming, sources say

Colleagues:

Advertising revenue is said to have tanked in LA during the first half of the year, and the result is a cost-cutting campaign that includes staff reductions through voluntary buyouts. Newsday and the Baltimore Sun are facing staff reductions, too.

We don't yet know any of the most important details. How many positions will be cut? Not clear. Who will be eligible for the buyout? No idea. How generous or ungenerous? Unknown.

But it sounds likely that the particulars will come out very soon, and that the initial deadlines for making decisions will be short -- perhaps as short as the end of June, only three weeks away. For what it's worth, the Baltimore Sun's current buyout offers two weeks of pay per year of service, up to a maximum of 52 weeks; there's no guarantee that the LA Times offer will be the same, though.

Three useful facts I do know:
-- This buyout is paper-wide; it's not aimed at the Washington Bureau in particular.
-- There's no last-hired, first-fired rule. People who have been hired recently may not even be eligible.
-- This newspaper has weathered buyouts before -- four or five buyouts over the last 12 years, in fact -- and come out fine on the other end. It's not a fun process; but if it's done carefully and well, it doesn't weaken the paper in the long run.

We'll let you know as soon as we hear more. But that's everything I know at this point. Thanks for your patience.

Doyle

Previously on L.A. Observed: Spring Street angst


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