Star-Telegram begins work force reduction

Posted Monday, Jun. 16, 2008  comments  Print Reprints
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The Star-Telegram will reduce its work force by 130 people through layoffs and voluntary buyouts as part of corporatewide cost-cutting by its parent, the McClatchy Co., officials announced Monday.

Publisher Gary Wortel said the job cuts account for about 10 percent of the Star-Telegram work force and will affect virtually every department, from the newsroom to advertising, circulation and the press operation. He said advertising revenue has declined in the past year, and the losses have accelerated with the economic slump that is gripping the country.

Despite that, surveys show that changes made to the paper and its online operations over the past 12 months have increased the Star-Telegram's total audience and reader satisfaction, Wortel said. But the economic forecast for the near term is not encouraging and persuaded McClatchy to downsize the work force at the 30 daily papers it owns across the United States.

"This is a painful but necessary step," Wortel told employees. "We're operating in a time of great change for the Star-Telegram and the newspaper industry in general. As a news company, we have often reported on such transitions in other industries. Now we face the painful realities ourself."

McClatchy, based in Sacramento, Calif., announced Monday that it will cut about 1,400 jobs at its 30 papers nationally, which include The Miami Herald, The Kansas City Star and The Sacramento Bee. McClatchy acquired the Star-Telegram with its purchase of Knight Ridder in 2006.

"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 work force and make our operations more efficient," McClatchy Chief Executive Gary Pruitt said in a statement.

McClatchy's advertising revenue fell nearly 17 percent in May from the same month a year ago, the company reported Monday. Classified-ad revenue plunged 27.4 percent, including drops of 38 percent in real estate and 39 percent in help-wanted. Such declines have been occurring throughout the newspaper industry.

The work-force cuts are expected to produce annual savings of about $70 million as part of a plan to reduce overall expenses by $95 million to $100 million over the next year, McClatchy said. In addition to the job reductions in Fort Worth, Wortel said the Star-Telegram would be making other changes in its business model, including combining some sections to save on newsprint and raising the cost of home delivery, the first price increase in three years. A seven-day subscription will increase by $1.50 a month to $17.50. That's still nearly $2 less than the average cost of a subscription in other Texas markets such as Dallas, Houston, San Antonio and Austin.

Wortel said he does not expect the changes to endanger the company's dominant position in the market.

"We'll still have hundreds of journalists at the paper. That's more than all the media outlets on our side of the Metroplex combined, and the audience we deliver over a week's time can't be matched by anyone," he said. "We're confident in our ability to navigate to a stable and prosperous future as an integrated media company serving as our community's most trusted supplier of news and advertising information."

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