Continued Problems In Journalismland: AP To Cut 10 Percent Of Workforce
It has been said over and over by newspaper people recently that the newspaper biz ain’t what it used to be….and neither is the newsmagazine biz…and now it turns out neither is the wire service biz: the AP reportedly plans to trim its workforce by 10 percent:
Reuters quotes sources at AP who were present when AP Chief Executive Tom Curley delivered the news as part of a “town hall” meeting with employees. The cuts are said to be made to assist AP to cope “with tough financial times and ailing member newspapers.”
AP said in a statement that “All areas and ways of doing business are being reviewed. The AP, which recently instituted a strategic hiring freeze, may need to reduce staff over the next year. If so, it hopes to achieve much of the reduction through attrition.”
AP has made headlines this year as members have resigned or have considered doing so, including the Tribune Company.
No matter where you look, the industry is cutting back. Just a few instances:
*The venerable Christian Science Monitor, even with its heavy subsidization from its Church, will no longer be a paper newspaper but only an online newspaper.
*The San Diego Union-Tribune here in San Diego, CA (my alma mater) is up for sale, limited buyouts were offered, and a slew of sometimes-legendary newspaper people who got them or didn’t get them have left the building. Those who remain and didn’t get buyouts could eventually be laid off when the paper sells.
*Cutbacks are underway at the L.A. Times. The paper doesn’t look the same on Sunday: the paper used to have a world-class Sunday opinion section. It is now a shadow of what it was (if it appears as a section anymore, or more than two pages).
*Florida’s Palm Beach Post cut 300 positions this summer and is expected to axe 300 more by next year.
The overall business outlook for newspapers is similarly grim, according to one respected measure:
Only one publicly-traded newspaper company is in a safe financial situation, according to a statistic designed to measure a company’s chance of failure.
Last week at the American Press Institute’s closed-door summit of 50 of the top newspaper executives from around the country, James Shein, a turnaround specialist and professor at the Kellogg School of Management at Northwestern University, asked executives to calculate their company’s Altman Z-scores, which can help identify how close a company is to bankruptcy.
A score above three is the accepted safe range. Shein said only one company was above that measure. EW Scripps Co. has a Z-score of 3.78, according to Bloomberg.
Lee Enterprises Inc., which publishes The Times of Northwest Indiana and the St. Louis Post Dispatch, has a Z-score of .56 and the Sun-Times Media Group Inc., which publishes the Chicago Sun-Times and a large number of community newspapers in the Chicago area, has a Z-score of minus 1.02.
McClatchy Co., which publishes The Miami Herald and 29 other daily papers, has a Z-score of .32. The company’s stock “could be worthless,” according to a report by Chicago-based Morningstar Inc.
Newspaper companies are eroding in both revenues and circulation — not a good trend.
In the case of AP, the respected news service may soon face a new debilitating problem: competition from CNN.
Also this week, in what could be seen as a direct attempt to compete with the Associated Press, Atlanta-based CNN announced it is starting a wire service for newspapers and other digital media organizations. The Associated Press has struggled in recent months because an increasing number of member newspapers are terminating their subscriptions with the wire service when their contracts end. CNN is offering newspaper editors an all-expense-paid trip to Atlanta so that they can better learn about the new wire service, which will cover sports, current events, politics and breaking news.
Gannet isn’t spared in its business in the USA, either:
Finally, following days of Internet rumors that said more cuts were coming to Gannett newspapers, newspaper chief Bob Dickey sent a memo to all 84 Gannett publishers Tuesday morning indicating an involuntary 10 percent staff reduction company-wide by early December. Although Gannett isn’t releasing figures, nearly 3,000 jobs are expected to be lost in the budget cutting move. Gannett, which owns the Fort Collins Coloradoan, recently employed 3 percent company-wide cuts earlier this summer.
The wave of cutbacks in America’s newsrooms have totaled more than 12,000 jobs this year and more are expected as the industry continues to find its place in the Internet world.
All this is circular and comes back to AP:
For generations, AP has served a growing newspaper industry.
Now it must serve a shrinking newspaper industry.