McClatchy’s budget woes lead News and Observer to cut 70 positions

It’s another sad day for the newspaper industry, as McClatchy Co. announced it is cutting 1,400 jobs across the company. McClatchy owns 30 daily newspapers, including Raleigh’s News & Observer. The N&O announced yesterday that it is laying off 70 people, including 16 newsroom employees.

The N&O will also trim costs by combining its Business and City & State sections, reducing the amount of editions that provide tailored news to different circulation areas and by merging its sports, political and research departments with the Charlotte Observer’s departments, the paper reported. These changes come a week after the newspaper announced that it is raising subscription rates.

The move is meant to help ease McClatchy’s budget woes, according to the company’s news release about the layoffs.

McClatchy’s cash expenses were down 10.5% in the first quarter of 2008 and FTE (full-time equivalent employees) count was down 7.5% from prior year.

The moves announced today will produce annual savings of about $70 million from staff reductions as part of a plan to reduce overall expenses by $95 million to $100 million over the next four quarters. Combined with previous expense control initiatives, the company expects to reduce non-newsprint cash expense in the low double-digit percentage range over the balance of 2008 excluding severance costs of about $30 million.

I should note that I used to work at The Island Packet, a McClatchy-owned newspaper on Hilton Head Island, SC, before accepting my job here at WNCN. The Packet, which has a small staff of hardworking reporters, also suffered two layoffs — a reporter and advertising employee. In a memo to Packet staff, the publisher wrote:

We’re operating in a time of great change and challenge for our operations, for The McClatchy Company and for the newspaper industry overall. Increased competition and a pronounced economic downturn have combined to reduce revenues dramatically, and these cuts are part of the way we must respond.

Obviously the Internet and the economy is having a dramatic effect on the ability of newspapers to make the kind of profits Wall Street likes to see. But the suits seem to forget that while newspapers need to be repurposed, they still need to produce quality content. And engaging human interest stories, investigative reporting and holding the government accountable all take staff. When you eliminate newsroom staff, duties are shifted to reporters who are already busy with their own beats, or in some cases, those duties are eliminated altogether.

A sad day indeed.