Tribune Co. to cut staff by 2%
Tribune Co., struggling with declining revenue, said Wed- nesday it would cut staff by 400 to 500 people companywide, or about 2% of the Chicago-based media company’s workforce.
At the Los Angeles Times, 100 to 150 jobs would be eliminated -- 40 to 50 of them in the newsroom -- through a combination of attrition, voluntary buyouts and, if necessary, layoffs, Publisher David D. Hiller said.
Tribune Chief Executive Sam Zell broke the news in one of his frequent “Talk to Sam” e-mails to all employees. The job cuts are focused on the corporate staff and the company’s nine newspapers. Besides The Times, they include the Chicago Tribune, Newsday in New York, the Orlando (Fla.) Sentinel, the Baltimore Sun and the Hartford (Conn.) Courant.
The decision was reached in meetings of senior executives Monday and Tuesday at Tribune’s Chicago headquarters, said Hiller, who was among them.
For now, Tribune’s broadcast division, consisting of nearly two dozen stations around the country, including KTLA-TV Channel 5 in Los Angeles, will be spared. Fox TV veteran Ed Wilson, hired last week to run the broadcast operation, will be given time to evaluate his business and make his own personnel decisions later, according to a Tribune executive familiar with the situation.
The job cuts will come swiftly. Hiller said all the people affected would be out of the company by the end of March. The Times has 3,544 employees, 887 of them in the newsroom.
As in previous buyouts and layoffs at The Times, most departing employees will receive two weeks’ pay per year of service, but this time there are two new elements.
First, Hiller said, any buyouts next year would involve smaller severance packages -- probably one week’s pay per year of service. “Anyone who’s been thinking about taking advantage of such a program might want to think seriously about this one,” he said.
Second, the cash to finance the buyouts would come from the over-funded portion of Tribune employees’ cash-balance pension plan.
Hiller said Tribune officials had determined that the defined-benefit plan had about $300 million more than it needed to meet future obligations to retirees. Rather than leave that cash “just sitting there,” Hiller said, Zell was using it to fund the buyouts and -- in a program announced Tuesday -- to make a one-time, cash contribution of 2% of employees’ salaries to a new cash-balance plan.
Zell said the money for the new plan would help compensate workers for the annual profit-sharing contribution that Tribune had made in past years to their pension accounts. Zell said Tribune’s former executives decided to eliminate the profit-sharing contribution for 2007 but left it to him to convey the bad news.
Zell, in conjunction with an employee stock ownership plan, or ESOP, led the $8.2-billion buyout of Tribune that was completed in December.
Since Zell’s bid for the company was accepted last April, advertising revenues for newspapers and broadcasters across the country have fallen sharply because of a combination of a severe real-estate slump, fears of a possible recession and stiff competition for ads from Internet-based rivals.
Zell said Tuesday that through the third quarter of 2007, Tribune’s cash flow had declined by 12% from a year earlier. Most observers inside and outside the company believe the situation has deteriorated since then.