An ambitious bet on print journalism in Southern California was dealt a blow this week when the owner of the Orange County Register and Riverside Press-Enterprise laid off dozens of employees at the two papers.
The elimination of 71 employees, many of them seasoned journalists, marks a sharp reversal by Aaron Kushner, who controls Freedom Communications Inc., which owns both papers. The former greeting card executive had spent much of the last 18 months growing his publications, acquiring additional news outlets and hiring more than 100 reporters and editors in the process.
Freedom's bold expansion had been heralded as a vote of confidence in newspapers at a time when advertisers are shifting away from print media. But the layoffs, which were announced to some staff members beginning Tuesday, came as a reminder of the challenges still facing the industry.
Kushner announced the layoffs at his flagship Register in an email to staffers Thursday afternoon.
"Today we concluded a difficult but important restructuring of our O.C. Register content team that reflects our assessment of what our content team looks like to tackle the next phase of our growth," Kushner said. "The 32 friends and colleagues leaving us have helped the Register navigate through some very challenging times. We are grateful for their service."
That came less than 24 hours after Kushner told staff at the Press-Enterprise that 39 employees at that newspaper had been dismissed. In addition, he said the daily would begin carrying Register content starting Monday.
Media analysts have grown increasingly skeptical about Kushner's plans in light of the current advertising environment.
"All of us looking at Freedom from the outside have wondered how the economics of this could work," said media consultant Alan D. Mutter. "It didn't seem like it could pencil out."
Kushner confirmed the departure of the Register's longtime editor, Ken Brusic, along with three deputy editors. The new editor, Rob Curley, had overseen local news coverage for the paper.
In addition, a number of longtime Register reporters and editors were given notice Thursday. Among them was Ron Campbell, a reporter specializing in data-driven investigations, who posted on his Facebook page that he had been laid off.
Cuts have been even deeper at the Press-Enterprise, which Freedom bought in November for $27.25 million.
Among the 39 layoffs there this week were roughly a dozen copy editors, many of whom were told they could apply for jobs at the Register's Santa Ana headquarters. In December, the Press-Enterprise laid off 42 employees, among them five editorial staffers, as well as then-Editor Nels Jensen, who said staffers there initially viewed Kushner as a potential savior.
"Journalists in the PE newsroom were guardedly optimistic that he would be a champion of local news," Jensen said Thursday. "They didn't expect him to go wild hiring people, but they didn't expect to see 18 or so peers lose their jobs in the first month, either."
A spokesman for Freedom did not elaborate beyond Kushner's internal email.
Kushner, who had no prior newspaper experience, bought Freedom in 2012 for $50 million plus assumption of pension liabilities. He preached the virtues of local journalism and a print product, and quickly invested heavily in both.
As he boosted staffing at the Register, Kushner expanded the paper, adding numerous new sections. He launched a new daily, the Long Beach Register, and followed through with his plan to acquire the Press-Enterprise, despite difficulties in procuring financing.
Late last year, he said he would debut a new newspaper, the Los Angeles Register, to compete with the Los Angeles Times and the Los Angeles Daily News. Freedom has said it would debut in spring. But the editor named to run it, Donna Wares, was promoted to managing editor of the Register Thursday.
Despite Kushner's optimism, Freedom faces mounting financial obstacles. Kushner has acknowledged that Freedom was not profitable through the first six months of 2013, and he has been hit by a series of lawsuits that suggest the company's fiscal picture may be bleak. Nearly a year ago, the company stopped offering a match into employees' retirement accounts, a step often taken by companies with cash flow issues.
Still, the setbacks have not deterred Kushner. He has expressed interest in buying other area newspapers. And Wednesday's memo to the Press-Enterprise said he'd hire more reporters to cover local issues.