McClatchy (MNIQQ), owner of 30 US newspapers, announced on Thursday it will furlough 4.4% of its employees, lay off four executives and reduce some executive compensation to address the financial pressures from coronavirus.
The company, whose newspapers include the Pulitzer Prize-winning Miami Herald, The Kansas City Star and The Sacramento Bee, employs about 2,700 people, so the plan translates to more than 115 temporary job losses. The reductions will mostly affect McClatchy’s advertising department, while the editorial department will be spared, McClatchy Vice President of News Kristin Roberts told CNN Business in an interview on Thursday.
“We’re taking some steps that helps us make sure that our expenses are aligned with our revenue,” Roberts said. “Everybody in the local news business and in the news business at large has seen their revenue pressured by the impact of the coronavirus. We have worked very carefully and quite precisely and that’s allowed us to insulate our news team from these cost reductions.”
Over the last month, media companies across the country — alt-weeklies, local newspapers and digital media outlets — have laid off or furloughed employees or instituted pay cuts to mitigate the loss of ad dollars as businesses shutter or end discretionary spending in the wake of coronavirus. Newspaper conglomerate Gannett, for example, furloughed the majority of employees, requiring them to take one week unpaid in April, May and June. Tribune Publishing, the third largest US newspaper owner after Gannett and McClatchy, announced on Thursday permanent pay cuts for non-unionized employees who make at least $67,000, according to an internal memo obtained by CNN Business.
These changes come as news organizations were already under financial stress. McClatchy filed for bankruptcy in February.
McClatchy CEO Craig Forman announced the changes on Thursday in an internal memo, which was obtained by CNN Business. In the memo, Forman said that he will take a 50% pay cut to his total compensation and five other executives will take 15% pay cuts.
Forman also announced the elimination of some executive positions, resulting in four layoffs: Sara Glines, east region lead and president and publisher of The News & Observer; Gary Wortel, west region lead and president and publisher of The Sacramento Bee; Kim Nussbaum, head of sales projects and business transformation; and Bryan Harbison, planning director.
“While customer revenues and our news operations in many ways are outperforming in key metrics, our advertising business is suffering despite an all-out effort from our team to beat the nationwide trends,” the memo reads. “We must, therefore, adjust while doing our utmost to safeguard the core mission of our enterprise: delivering news and information that is vital to our subscribers and customers in communities we serve across the country.”
Roberts told CNN Business that McClatchy hopes to hire its furloughed employees back as soon as possible. The company will continue to cover the health benefits of those who are furloughed.
“We’re setting it up in a way that allows us to bring them back without interruption the moment we are past this,” Roberts said. “We’re going to work very hard to straighten this situation out as quickly as we can.”