SACRAMENTO, Calif. (AP) - Newspaper publisher McClatchy Co. said Monday that it will shrink its work force by another 15 percent as it contends with sharply declining revenue amid a deepening recession.
The 1,600 job reductions should help the publisher of The Miami Herald, The Sacramento Bee and other newspapers meet previously announced plans to save up to $110 million over the next year. McClatchy Treasurer Elaine Lintecum said the company will likely exceed that target, but the company did not release a new estimate.
"The effects of the current national economic downturn make it essential that we move even faster to realign our work force and make our operations more efficient," Chairman and Chief Executive Gary Pruitt said in a statement.
Pruitt will take a 15 percent cut in his base salary, while other executives will see their pay reduced by 10 percent. Pruitt got a $1.1 million salary in 2007, the last year for which McClatchy has disclosed his pay.
Cash compensation to the company's directors will decline about 13 percent. Senior executives are also forgoing bonuses in 2008 and 2009, while directors are declining stock awards.
Other wage cuts are planned, but the company did not provide details.
Shares in McClatchy fell 15 cents, or 25 percent, to 44 cents in morning trading.
The newspaper industry has seen ad revenue fall in recent years as advertisers migrate to the Internet, particularly to sites offering free or low-cost alternatives for classified ads. Starting last summer, the recession intensified the decline in advertising revenue in all categories.
Many newspaper publishers, including McClatchy, also face debt incurred during healthier times. The company owed about $2.04 billion as of the end of 2008, stemming mainly from its 2006 acquisition of the Knight Ridder newspaper chain.
McClatchy already went through two rounds of job cuts of about 10 percent each last year to produce an estimated $200 million in annual savings. It also plans to suspend dividend payments after April 1 to conserve cash.
The company said its cost-control efforts, excluding severance and other benefit charges, led to a 14.4 percent drop in cash expenses for the fourth quarter.
The latest round of cuts, which will start by the end of the first quarter and include just about every business component, will come through attrition, consolidation and the outsourcing of some functions. The company expects about $30 million in severance costs.
McClatchy has 30 daily newspapers, about 50 non-dailies and direct marketing and direct-mail operations.
Last week, The Sacramento Bee announced plans to cut 34 of the 268 union-covered positions in its editorial and advertising departments. Another 19 jobs would have been in jeopardy, but union members agreed to take pay cuts to save the positions.
The Fort Worth Star-Telegram in Texas and The Sun News of Myrtle Beach, S.C., also disclosed job cuts last week, which are part of the 1,600 announced Monday.