L.A. Times plans job cuts

The Los Angeles Times announced Monday that it would offer voluntary buyouts in hopes of cutting its staff of 2,775 by as many as 150 employees -- seven months after two of the paper’s top executives spoke out against such cuts.

Publisher David D. Hiller said in an e-mail to the newspaper’s workers that the reductions were necessary because revenue and cash flow continue to fall with the company about to be sold to Chicago real estate mogul Sam Zell. In the first quarter, the publisher said, revenue for The Times dropped 4% from a year earlier, with cash flow falling 13%.

“We also have to look at our staffing levels again, as painful as it is, and as many times as we have done it before,” Hiller said in the memo. “The fact is we have to take actions to keep staffing in line with the revenue picture, which currently is falling in the core print business.”

As many as 70 jobs could be cut from the newspaper’s news operations, which would bring the newsroom staff to about 850. The Times news operation employed about 1,200 when the paper was purchased by Chicago-based Tribune Co. in 2000.

Potential staff reductions at The Times roiled the newspaper industry last fall, when first Publisher Jeffrey M. Johnson and then Editor Dean Baquet left the paper under pressure. They said that cutting reporters and editors would hurt the quality of The Times. Tribune executives argued that their Los Angeles paper could maintain quality even with the cuts.

Hiller sought in his statement Monday to stress the paper’s future opportunities. He noted that online revenue had been increasing 20%.

But Hiller said in an interview that uncertainty in the newspaper business made it impossible for him to promise that there would not be further cuts.

In his e-mail, the publisher urged his employees to focus on new priorities, including retooling all operations to be “fully multimedia”; expanding into new audiences, such as the push for Spanish-language readers with the company’s Hoy daily; and changing the newspaper to “better serve our local audience and reflect how readers live, and use print, today.”

Times newsroom employees expressed particular concern about the cuts, while workers on the paper’s business side said it was important that the staff changes be made strategically.

National reporter Stephanie Simon worried that the kind of in-depth coverage that the paper produced after last week’s shootings at Virginia Tech “will be less and less possible as our staff absorbs cut after cut.” Like other reporters, Simon said she was concerned “that if the numbers don’t pan out as management hopes in the second or third quarters, we’ll face yet another round of layoffs and buyouts.”

Advertising executive Michele Manzo-Lembo said the buyout plan attempted to “intelligently manage” who left and who stayed.

“But it’s always a risk,” she said. “You might lose some good people because the timing and opportunity might be right for them.”

The plan would pay Times employees who volunteer to leave the equivalent of two weeks’ salary for every year they have been at the paper. The departing employees could receive a maximum of 52 weeks’ pay and benefits.

The paper’s executives said they hoped to accomplish most of the reductions through the voluntary program. But the paper also plans to see how much it can reduce staff expenses by offering workers four-day-a-week employment. And there are expected to be an unspecified number of other “involuntary position eliminations.”

Volunteers for the buyouts were asked to submit their applications by May 14, with the company to respond with the list of those to be cut by May 25. The announcement said that employees’ last day of work “generally will be no later than Friday, June 1.”

Some employees complained about the high compensation and bonuses received by Tribune Co. executives in a time of job reductions.

Zell’s purchase of Tribune would boost the value of stock held by Chief Executive Dennis J. FitzSimons to $22.9 million. Tribune Publishing President Scott Smith’s Tribune shares would be valued at $10 million. Senior Vice President Donald Grenesko has shares that would be valued at $10.6 million.

More than three dozen company executives stand to reap large windfalls that could be worth hundreds of millions of dollars in total from the 8% equity interest they would receive in a newly privatized Tribune Co. Those gains are dependent, however, on the future success of the company.

Asked what he would say to management about their compensation at a time of job cuts, Times California columnist Steve Lopez responded: “That’s another winning plan from the one-trick brain trust: Whack the staff, stiff the readers and count your bonuses. I’ve gotten many a column out of lesser scoundrels and dunderheads.”

Editor James E. O’Shea made reference to such strong feelings in a memo to the staff Monday morning. “I cannot -- and will not -- defend any such bonuses,” he wrote. “Frankly, I understand why you are angry about these plans.”

O’Shea told a group of senior journalists Monday afternoon that he urged Hiller to avoid another round of job reductions later this year. O’Shea said he did not intend to oversee such cuts, according to two reporters who attended the meeting.

“I did not come here to preside over a decline of this great newspaper,” the editor wrote in the morning e-mail to his staff. “I consider the loss of each and every journalist or employee in this company a failure.”

james.rainey@latimes.com