Bad News: Layoffs Likely At 'New York Times'

NewspaperThe New York Times will likely have to lay off some employees, since it didn't find enough recruits for voluntary buyouts aiming to trim the paper's newsroom staff by 100. The announcement came from Assistant Managing Editor Bill Schmidt in an internal memo to employees. He did not specify exactly how many layoffs would be required. This warning may motivate more people to take the buyout offers at the last minute, before next week's deadline.

Over the last five years, NYTCO has trimmed its staff by over 2,000 employees--or about 18% of the original total--from 12,400 in 2003 to 10,231 in 2007. Like other publicly traded newspaper publishers, the company has come under increasing pressure from shareholders to slash costs, increase profits and raise the flagging share price. The company's stock has fallen from roughly $45 per share in 2003 to $23.40 at the time of writing.

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Ken Doctor, a newspaper analyst with Outsell Inc., remarked that the low opt-in rates for the NYTCO buyouts probably reflects a dearth of career prospects as the newspaper business in general contracts.

"As the journalist looks around in 2008, where else do they go--where can they find gainful employment?" The scenario is especially risky for mid-career journalists with home mortgages and families, and for older journalists. A drop in the volatile stock market could slice the value of stock-based retirement funds.

Looking at the newspaper business overall, Doctor sees the buyouts continuing at least through the end of 2008, if not beyond. "Clearly, the decline in revenues is deepening. At this point, there really is no bottom." As layoffs continue, in future he predicts "a lot of newspapers hiring part-timers, stringers and bloggers--but no more full-time, $50,000-a-year jobs."

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