• by Joe Mandese  @mp_joemandese, May 26, 2005

At a time when the newspaper industry is struggling with declining print circulation and sluggish ad demand, two of the nation's largest newspaper groups announced restructurings. The New York Times Co. said it would reduce its staff by 190 employees, while Gannett Co. named a new CEO.

The Times Co. said its cuts, which would represent less than 2 percent of its total workforce, would impact the company's flagship The New York Times, as well as the New England Media Group, which includes The Boston Globe. About two-thirds of the cuts will be made within The Times including the paper's newsroom.

Wall Street analyst Lauren Rich Fine of Merrill Lynch estimated the cuts would save the publisher about $19 million per year, but nonetheless maintained a "neutral" rating for the company's stock, noting that the papers might "selectively" add positions to replace the ones being cut.

"Clearly, the ad environment remains difficult and The New York Times Co. does not see a substantial pick up in the near future," wrote Fine in a research note to investors. "Last week, we lowered our second half 2005 ad revenue assumptions to 3.5 percent to 4 percent from closer to 5 percent to 5.5 percent as we sensed momentum is not improving. Additionally, we trimmed our 2006 ad revenue forecast from 5% to 4%, but are not totally convinced we went far enough."

Fine was no more upbeat about Gannett's, the nation's largest newspaper publisher, decision to name Craig Dubow, head of the company's broadcast group, to become its new CEO, succeeding Douglas McCorkindale. Fine indicated it was a default move due to the lack of external candidates and pointed out that Dubow has no newspaper publishing experience. On the other hand, he has had responsibility for some of Gannett's fastest-growing revenues areas, including TV and new media operations like Captivate, the place-based elevator network Gannett acquired last year.