Washington Post Co plans to offer a new round of buyouts in 2009 to employees at its namesake, money-losing newspaper and cannot rule out layoffs, its publisher said on Thursday.
The buyouts, which the Post will offer to newsroom, production and circulation employees, are aimed at cutting costs at the paper, said two memos obtained by Reuters.
The Post's move comes as a host of other U.S. publishers have cut back staff, declared bankruptcy or shuttered once-vaunted newspapers, as readers seek news online and elsewhere and as the recession crimps advertising spending.
While online revenues have been growing, they have not yet grown fast enough to offset the declines we are seeing in print revenues, Washington Post Publisher Katharine Weymouth wrote to employees. We will have to reduce our cost structure. This has not been and will not be easy.
While we expect to be able to achieve meaningful staff reductions ... I am sorry to say that we cannot rule out layoffs in the future, she wrote.
The first wave of workers taking the buyouts would leave in July, Weymouth told Reuters in an interview. She would not specify how many jobs the paper wants to cut, and would not say how many news staffers the Post employs.
The news comes a day after Washington Post Co Chairman and Chief Executive Donald Graham, Weymouth's uncle, told shareholders in a letter that the Post and Newsweek magazine lost money in 2008 and that the Post will lose money in 2009.
Some will be noncash accelerated depreciation because we will be closing a printing plant. Most will be real losses, he wrote. We are willing to lose money ... if the losses are on a path to a healthy, profitable business.
Weymouth said she has submitted a plan to Graham, Post management and the board, which includes Berkshire Hathaway Inc chief Warren Buffett, to make the paper profitable.
She declined to offer specifics or timing, but said that it is partly about cutting costs to a sustainable level and making sure you're investing in platforms for the future.
The Post will not venture down the path of other papers that are eliminating their print editions on days of the week that traditionally bring in fewer ads, she said.
The Post's woes are similar to those of other U.S. papers. Many have lost 20 percent or more of their ad revenue as more people get their news online for free instead of paying for it in print. The financial crisis has worsened the losses.
USA Today publisher Gannett Co Inc is furloughing employees and has laid off others. McClatchy Co recently announced its third round of layoffs in a year.
Other publishers are also furloughing employees and making other cuts to stay afloat. Tribune Co, Journal Register Co and the publisher of The Philadelphia Inquirer and Daily News are trudging through bankruptcy court.
EW Scripps Co closed the Rocky Mountain News in February. Hearst Corp shut down the print edition of the Seattle Post-Intelligencer, may close the San Francisco Chronicle and is cutting 12 percent of the staff at the Houston Chronicle. The Atlanta Journal-Constitution is cutting a third of its full-time newsroom staff.
The Post has offered buyouts on several occasions in the past few years. A round in May reduced the newsroom staff by at least 10 percent, when more than 100 journalists left. The Washington Post Co recorded an $87.4 million charge for that round, as well as ones offered to Newsweek magazine employees.
The Post is not offering the buyouts to website employees, who likely will leave their Arlington, Virginia, headquarters by the end of the year and move into the Post headquarters in Washington, D.C., Weymouth said.
We're focused as much as possible on investing in digital, she said.
Post shares were up $3.65 to $381 on the New York Stock Exchange in morning trading. The shares have lost 43 percent of their value in the past 12 months.
(Reporting by Robert MacMillan, editing by Gerald E. McCormick and Derek Caney)