Tribune announces 250 job cuts in Chicago and Los Angeles

Tribune Co. executives announced a total of about 250 job cuts in Chicago and Los Angeles on Monday as the Chicago-based media conglomerate continues to struggle with declining advertising and circulation revenues.

The Chicago Tribune Media Group will eliminate 100 jobs through a combination of buyouts and layoffs and the Los Angeles Times will cut between 100 and 150 positions using the same methods.


In both cases, executives said they would try to first accomplish their goals through buyouts that would give qualified employees one week of salary and benefits for every six-month period they have worked for the company.

Layoffs would follow to the extent they are needed. The Los Angeles Times will also consider letting employees switch to a four-day workweek for 80 percent of their pay and limited benefits.

Noting that the Chicago Tribune group's first-quarter revenue dropped 4 percent from a year ago, Scott Smith, president of Tribune Publishing and publisher of the Chicago Tribune, said in a memo to employees that full-year revenue will likely come in below last year's. Then he gave voice to a bind the entire industry finds itself in: "Therefore we need to achieve additional expense savings at the same time we focus on revenue growth," he said.

Doing more with less has become a fact of life in the newspaper industry. And it has taken on special urgency at Tribune Co. since earlier this month, when the company agreed to a complex deal with Chicago billionaire Sam Zell to take Tribune private through an employee stock ownership plan.

Smith sought to relieve anxiety about the deal, which will add $8.4 billion in new debt to the $5 billion already weighing down the company's balance sheet, by starting his memo with assurances that "current retirement benefits are protected and secure and eligible employees will have substantial future upside potential through the new ESOP."

Los Angeles Times Publisher David Hiller got right to the point. His memo began: "We're announcing today a series of actions…that will eliminate 100 and 150 jobs at the Los Angeles Times."

Hiller said that revenue in Los Angeles also fell 4 percent in the first quarter but that cash flow fell 13 percent, slightly worse than the company as a whole. Online revenue, he said, was growing at about 20 percent, "but the growth in new media is not yet big enough to offset the decline on the print side of the business."

Hiller and Times Editor James O'Shea had been publisher and managing editor respectively of the Chicago Tribune until last fall, when they replaced former Times Publisher Jeffrey Johnson and Editor Dean Baquet. Johnson and Baquet had fought back against further job cuts and were given folk-hero treatment in the press for standing up to the cost cutting that has been sweeping through the industry for several years as readers and advertisers defect to the Internet.

O'Shea, who made a point of saying he would fight to keep jobs at the Times, said in a memo to the staff of the paper, "I know this is not a happy day for people in the newsroom, including me."

"In a perfect world," O'Shea wrote, "I would prefer that every employee stay here. Unfortunately we don't live in a perfect world."

O'Shea said he is encouraged that Zell has said he "believes in the value of what we do" and that newspapers still represent a good business. "He is someone who can peer through clouds of doubt and see a different and better future. I welcome that kind of thinking and spirit," O'Shea wrote.

He also made no secret of his frustration with having to cut jobs in Los Angeles while executives in Chicago get bonuses for selling the company.

"A number of you have asked me how we could cut jobs to save millions of dollars at a time when a group of unnamed executives will reap bonuses and stock grants worth millions when the change of ownership is complete," O'Shea wrote. "I cannot - and will not - defend any such bonuses. Frankly, I understand why you are angry about these plans."

The Chicago Tribune published a long list of positions eligible for the buyouts. Those who are deemed eligible will receive one week of "separation pay" for ever six months of service, with a minimum of four weeks and a maximum of 52. Benefits will continue as long as the separation pay, with a minimum of three months for health care coverage. Employees will also be given outplacement assistance.

The package at the Los Angeles Times will be essentially the same but the unit will also offer employees a voluntary four-day work week at 80 percent pay.

O'Shea tried to end his memo on an upbeat note, challenging his staff to work through a very tought time. "Don' t let the doomsayers convince you otherwise," he said. "We have a future; it is out there for us to claim."

mdoneal@tribune.com