McClatchy Co, the third largest newspaper chain in the US, is cutting 10 per cent of its workforce, or 1,400 jobs, as it attempts to cut costs after a record decline in newspaper advertising sales, the company said Monday.
The Sacramento, California-based company, which publishes the Miami Herald and 29 other daily newspapers, said the move will result in savings of some 70 million dollars annually, and is part of a plan to save as much as 100 million dollars over the next year.
The company has already reduced its workforce by 13 per cent over the last two years through voluntary buyouts and attrition. But the continued decline in newspaper revenues forced it to take more decisive action, McClatchy Chairman and CEO Gary Pruitt said.
"The effects of the current national economic downturn - particularly in real estate, auto and employment advertising - make it essential that we move faster now to realign our work force and make our operations more efficient," Pruitt said in a prepared statement.
The move by McClatchy follows similar cuts at Tribune Co. and New York Times Co. as companies shift advertising dollars from newspapers to the Internet. According to the Newspaper Association of America, newspaper print ad sales slumped 14 per cent in the first quarter.
In May, McClatchy's advertising revenue fell nearly 17 per cent from the same month a year earlier, the company reported Monday. Classified ad revenue plunged 27.4 per cent, hit by free online competitors like Craigslist and also reflecting declines in the real estate market.