Seattle Times Co. to cut 200 jobs at flagship paper

The Seattle Times Co., stung by continued declines in advertising revenue, said today it will cut its flagship newspaper's staff by nearly 200.

The reductions will include up to 131 layoffs, the company said an e-mail to employees. Sixty currently unfilled positions will be frozen.The Times currently has 1,845 employees.

The staff cuts are part of $15 million in spending cuts that will be implemented over the next two months, Publisher Frank Blethen and President Carolyn Kelly said in an e-mail.

"These include significant changes to the way we do business and involve realignment and centralization throughout our organization," they wrote.

Vice President Alayne Fardella said in another e-mail that up to 45 circulation workers, 30 newsroom employees and 24 advertising staff could be laid off. The exact number will depend on how many employees choose to accept enhanced severance packages and leave voluntarily, she said.

Employees have until next Monday to make that decision, Fardella wrote.

Newsroom staff members who attended a meeting with Executive Editor David Boardman said they were told at least 16 employees in that department will be laid off, regardless of how many choose to depart voluntarily. Boardman also said the newspaper would stop publishing separate suburban zoned editions, the staff members said.

Today's cuts come on top of $21 million the newspaper sliced from its budget earlier this year. In January, the company said it was laying off 17 employees, eliminating 69 positions through attrition, and eliminating or combining some newspaper sections.

"We had hoped the expense reductions made at the beginning of the year would prevent the need for further downsizing, but that is not the case," Blethen and Kelly said in their e-mail. "The only responsible action to take is to better align our expenses to the reduced revenue we now anticipate."

Affected employees are being notified today, the executives wrote.

The layoffs had been rumored for days and came as no big surprise considering the string of bad-news announcements from the privately held company in recent months.

In a Dec. 27 e-mail to employees, Blethen said combined print advertising revenue for The Times and smaller Seattle Post-Intelligencer was down 9 percent in 2007 and had dropped more than one-quarter since 2000.

The Times and P-I maintain competing newsrooms, but The Times handles advertising, circulation, production and other business functions for both under a federally sanctioned joint operating agreement (JOA).

When the $21 million in budget cuts was announced in January, Times spokeswoman Jill Mackie warned further cuts could be necessary — Blethen had said in his year-end e-mail that $27 million in savings would be needed to "ensure stability" in 2008.

Since then, advertising revenues have declined more precipitously. In another e-mail to staff late last month, Kelly said that, through February, combined print advertising revenues for the Times and P-I were down 10.7 percent from last year and 1.5 percent from the 2008 goal.

More ominously, online advertising revenues were down 6.5 percent year-over-year and 17.7 percent from goal.

While online advertising constitutes only a small fraction of The Times' and other newspapers' total revenue, it has been growing rapidly in recent years. Many say it is the industry's best hope as it searches for a new business model.

Last month, The Times also put its three dailies and one weekly in Maine up for sale, saying it needed cash to help keep its flagship paper afloat.

The Times' troubles are far from unique. Newspapers' ad revenues dropped 7 percent nationwide in 2007, according to the Project for Excellence in Journalism, a research organization.

Cumulatively, stock prices of publicly traded newspaper companies declined 42 percent in three years, project researchers wrote recently in their annual report on the state of the media.

"Newspapers are still far from dead," the report said, "but the language of the obituary is creeping in. The industry has been in declining health for some time now. It got sicker rather than better in 2007, and 2008 offers no prospect of a quick cure."

The researchers estimated total newsroom employment nationwide was down 5 to 10 percent from its peak in 2000. Papers that have announced newsroom staff cuts in recent months include The New York Times, The Washington Post, USA Today and the San Francisco Chronicle.

While it is joined at the hip with The Times economically, the P-I — owned by New York-based Hearst Corp. — has not announced buyouts or layoffs.

No layoffs are planned, P-I Publisher Roger Oglesby said today, but "I will never rule out the possibility they might happen, and they might happen at any time."

The P-I has been cutting expenses and not filling most vacant positions, he said, "but it doesn't look like we're going to make money this year.... It's a very tough year."

According to the Pacific Northwest Newspaper Guild, P-I managers said at February staff meetings that the paper had lost $30 million since 2000 and that 2008 would be "the biggest money loser yet."

Eric Pryne: 206-464-2231 or epryne@seattletimes.com