More Newspaper Corporate Illness: McClatchy Will Cut Workforce 10 Percent
A slow but inexorable financial cancer continues to impact America’s newspapers and this is just the latest:
McClatchy Co. said Monday it will cut 10 percent of its workforce in a move to save $70 million a year as the newspaper publisher continues to struggle to attract advertising dollars.
McClatchy, which publishes The Kansas City Star and The Miami Herald, will trim about 1,400 employees. The staff reductions are part of a plan to reduce overall expenses by $95 million to $100 million over the next four quarters.
“The effects of the current national economic downturn – particularly in real estate, auto and employment advertising – make it essential that we move faster now to realign our workforce and make our operations more efficient,” said McClatchy Chief Executive Gary Pruitt, in a statement.
McClatchy said in April that it swung to a loss in the first quarter as a weakening economy and competition from online rivals led to a 15 percent plunge in advertising revenues at its newspapers.
On Monday, the company said May revenue fell 15.1 percent year-over-year, and ad sales were down 16.6 percent. Declines in print advertising were partially offset by a 12.9 percent gain in online advertising revenue last month.
“Realign the workforce” means lay people off because there isn’t enough money to support them all. The irony is that this will have an impact on the product — the newspapers’ content. The industry continues to have trouble maintaining circulation figures and particularly attracting younger readers who increasingly rely on the Internet and television — including shows such as Jon Stewart.
McClatchy is an excellent newspaper chain. It bought my old alma mater, The Wichita Eagle-Beacon and other papers of the once-great Knight-Ridder newspaper chain. Knight-Ridder’s demise was in the cards: in my travels throughout the country I had been shocked to see how the once great KRN newspapers’ wealth of content had been diluted and how boring some of the once-great newspapers had become. McClatchy, meanwhile, never wavered in keeping its flagship The Sacramento Bee a treasure chest of great content. After you read it, you had to give out a news consumer’s sated belch.
How bad has it gotten in newspaperland? The following is not an Andy Borowitz satire. A newspaper publisher is planning to outsource his site’s reporting to India.
If this idea clicks, then why not have some of the print newspaper’s reporting outsourced as well?
Why deal with pesky, expensive and complaining reporters when you can pay someone cheaper who can do the job and you don’t have to look at them or pay them benefits? Robert Niles writes:
Perhaps by now you’ve read the story of the news website publisher in my hometown of Pasadena, Calif. who has outsourced his site’s newswriting to India. The story blew across the Web yesterday and today; in fact, I did a radio interview with the BBC about it late last night. I think the story’s getting so much attention because it plays to journalists’ fear that the global outsourcing epidemic that many of us have been covering for more than a decade now threatens our jobs.
More importantly, I believe that the attitude behind the outsourcing reflects so much of what is wrong with the practice of journalism today.
As reported in the Los Angeles Times this morning, James Macpherson placed an ad on an Indian version of Craigslist looking for journalists to write for his PasadenaNow website. Macpherson plans to have the workers he hires transcribe interviews, cover webcast government meetings and conduct interviews via e-mail.
The Times reported Macpherson’s site gets about 45,000 visitors a month. From personal experience, I know that it’s tough to support a family, much less to hire employees, on income from a site with that traffic. And that’s assuming the 45,000 number reflects absolute unique visitors, not an accumulation of daily visits, and that the number does not include spiders and automated agents.
Indian contractors might crank out the copy, but engaging newswriting flows from solid reporting. A reporter needs more points of contact with a community than webcast meetings and an e-mail inbox to find the stories that a well-informed readership demands. Yet too many offline news publishers are following a similar model to Macpherson’s: Cut back investment in local reporting, outsource news coverage (usually to the AP wire) and disengage from the community by relying on low-paid, overworked reporters who cannot afford to live in the community they are assigned to cover.
That’s why smart online publishers are transforming their news publications into information-sharing communities. Yes, the economics of online publishing demand that one keep expenses low. Why pay contractors in India when you can solicit more informed coverage from local readers for free?
Stay tuned. The news biz is going to have to make some changes if it wants to adapt, survive and thrive.
The problem is: the changes don’t seem to benefit content — which is why young people shrug when you mention newspapers and why weblogs and other “new media” infosources continue to flourish and grow.
P.S. Some newspapers have hit it just right on the web presence and newsprint version content. Their newspapers are solid and they have great newspaper weblogs. Among them: The Los Angeles, USA Today, The New York Times, Washington Post, Philadelphia Inquirer, Philadelphia Daily News, New York Times, the Chicago Tribune and a few others. These are strong national or regional papers. Are we seeing the gradual demise of the local newspaper? Is the cancer merely in remission?