• by Erik Sass  @eriksass1, December 4, 2008

Like a monotonous drumbeat, this week saw another round of newspaper layoffs, indicating that there will be no relief for anxious newspaper employees this holiday season. As 2008 draws to a close, it may be fitting to look back on the disintegration of the once-proud newspaper titans, which have imploded in spectacular fashion over the course of just a few years.

This week's toll was bad but not surprising, beginning with reports that Gannett would be cutting 206 positions in New Jersey, up to 20 at the Arizona Republic, and 61 at the Reno Gazette-Journal. The New Jersey papers affected include the Asbury Park Press in Neptune, the Courier-Post in Cherry Hill, the Home News Tribune in East Brunswick, the Courier News in Bridgewater, the Daily Record in Parsippany and The Daily Journal in Vineland. Separately, the Cleveland Plain Dealer said it will lay off 27 employees. Last week, the publisher of the San Jose Mercury News warned that another round of layoffs at the paper may be coming.

The industry began to cut staffers in 2000. How much have the big newspaper publishers shrunk since then?

A lot. For example, in the halcyon days of 2000, the biggest newspaper publisher in the country--Gannett--had 41,000 employees in its newspaper division. Now, although the company does not release headcounts, it probably has 29,000 or less-- cutting 30% of its original workforce. The vast majority of these were cut in the last two years, including almost 5,000 in 2007 and 4,000 or more in 2008.

The Tribune Co. has also wielded the ax. From a total of 25,600 employees in 2001, after its acquisition of the Times Mirror Co. in March 2000, the company has slimmed down to around 18,000 at the end of 2008. Like Gannett, that's about 30% of the original workforce, but the rate of attrition has been steadier, with a minimum of at least a few hundred positions cut every year.

The New York Times Co. has not been spared either, dropping from 13,800 employees in 2000 to around 10,200 today. That's 3,600 or 26% of the original workforce. One of the most sweeping rounds of cuts came in 2006, when it shed over 1,000 positions. The belt-tightening continued into 2008, when the company said it would eliminate another 100 positions over the course of the year.

Some of the biggest reductions have come at McClatchy. At first, comparing the headcount at the end of 2008 with 2000, nothing seems amiss--but the interim saw McClatchy's acquisition in 2006 of Knight-Ridder, then the second-largest newspaper publisher in the country. In light of this fact, the shrinkage is substantial. In 2000 the two companies together had about 32,300 employees; in 2006, immediately after the merger, McClatchy had 16,791; now it has 11,500.

Taking into account the 12 Knight-Ridder papers that McClatchy sold immediately, along with the Minneapolis Star-Tribune, which altogether had a total staff of about 8,800, that's still a difference of 12,000 positions, or well over a third the original total.

Considering only full-time employee equivalents, the two companies together still cut about 7,200 positions out of a total 27,500 from 2000 to 2008, or over 25% of the original total.

The reason for these contractions: After decades of high profitability, newspaper businesses are under mortal threat from online advertising. They have seen their revenues hurtle into freefall. From a peak of just over $8 billion in 2006, Gannett's revenues fell to $7.4 billion in 2007, and could come in at $6.7 billion in 2008, given the current rate of decline.

At Tribune, revenues fell from a high of $5.7 billion in 2004 to $5.11 billion in 2007, and could be on course for $4.3 billion in 2008, based on current figures. The New York Times Co.'s revenues fell from $3.49 billion in 2000 to $3.2 billion in 2007, and could dip to $2.97 billion in 2008. Finally, while long-term comparisons are difficult because of the Knight-Ridder merger, McClatchy is also slumping, with 2008 on course for a 15% decline, to $1.95 billion.

The stock prices have followed suit: from a high of $76.05 in March 2005, McClatchy's stock was trading at $2.05 at the time of writing. Tribune's stock price plummeted from around $120 in June 2000 to $17.99 today. From a high of around $50 in June 2002, NYTCO's stock was most recently trading at $7.75. Finally, Gannett's stock price sank from a high of around $87.00 in December 2003 to $8.87 now.