The paper's employees are not obliged to take the week off all at once--meaning that they can space the seven days of unpaid leave out over the next couple of months. The request from the publishers comes on the heels of three waves of job cuts and layoffs this year alone--including 86 positions in January, 200 in April and 150 in November, for a total of 436, or about 22% of the original 1,950.
This stopgap measure indicates that the newspaper's publishers feel they have cut staff to the bone, reaching a bare minimum under which the business may no longer be able to operate. More troubling, the earlier layoffs have evidently failed to restore financial stability, suggesting that this emergency tactic will only delay further contraction temporarily. What shape this will take is anyone's guess.
Newspapers are adopting drastic measures to keep their heads above water. This week the Detroit Free Press and Detroit News, published under a joint operating agreement by Gannett and MediaNews, said they are cutting back home delivery to three days a week and two days a week, respectively. The Free Press is also producing a slimmed-down, single-section street edition for newsstands.
The prospect of newspapers simply closing is also becoming more real. The Rocky Mountain News--one of two dailies serving the Denver metro area--could be closed if it does not find a buyer by mid-January, according to owner E.W. Scripps--which announced that it was putting the struggling paper up for sale earlier this month. The prospects for finding a buyer are poor, however, as newspapers appear to be entering an irreversible decline while banks tighten their purse strings because of the credit crunch. On this note, a report from Fitch Ratings warned on Wednesday that "more newspapers and newspaper groups will default, be shut down and be liquidated in 2009 and several cities could go without a daily print newspaper by 2010."
A number of newspaper publishers with substantial debt are at risk of default under the terms of their lending covenants--including Tribune Co. and MediaNews. Philadelphia Media Holdings, the publisher of The Philadelphia Inquirer, defaulted in June, followed by The Journal Register Co. in July. McClatchy narrowly avoided defaulting on its debt by renegotiating lending agreements in September.