Drastic cuts ordered for Chronicle
By: John Upton
February 24, 2009
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| Bad news: Hearst Corp. executives announced that the company will sell or close the Chronicle if they are not able to make drastic cuts to the work force. (Cindy Chew/The Examiner) |
SAN FRANCISCO — The owner of the San Francisco Chronicle announced Tuesday it will close or sell the 144-year-old newspaper unless it achieves “significant” cost savings within weeks through layoffs.
Hearst Corp., which owns the Chronicle and 15 other newspapers, will work with the paper’s managers and unions to cut jobs and make other cost-saving changes at the daily publication after losing $50 million last year, the company announced in a statement.
The loss was the paper’s worst since 2001.
“Without the specific changes we are seeking,” company executives wrote, “we will have no choice but to quickly seek a buyer for the Chronicle or, should a buyer not be found, to shut the newspaper down.”
The Chronicle, Northern California’s largest newspaper with a paid weekday circulation of 339,430 and about 275 newsroom employees, has given Hearst Corp. financial headaches since the New York-based company bought the newspaper in a complex deal valued at $660 million. The late-2000 acquisition proved to be ill-timed. Shortly after Hearst took control, the Chronicle was hit hard by a high-tech bust that caused its advertising revenue to shrivel.
The newspaper’s losses have been piling up ever since, despite previous job cuts and other austerity measures that were designed to stop the bleeding.
Previous staffing and other cuts haven’t stemmed the newspaper’s losses, and new cost-saving initiatives have begun, Publisher Frank Vega told staff in a memo Tuesday.
“First and foremost of these cost savings will be a significant reduction in force,” Vega wrote.
The California Media Workers Guild is scheduled to meet Hearst officials at 10 a.m. today, according to Chronicle reporter and union official Carl Hall.
“It’s hard to imagine how you could reach $50 million in cost savings without some really deep job cuts,” Hall said. “On the revenue side, what can we do to increase revenues? Are there new products, new ways of selling or maybe we can do something online that we haven’t thought of before.”
Newspapers nationally have been hit by declining readership coupled with recessionary advertising downturns, according to Rachele Kanigel, associate professor of journalism at San Francisco State University.
“You’re seeing an industry in crisis, and then it’s being slammed by this economic climate,” Kanigel said.
Hearst offered another paper, the Seattle Post-Intelligencer, for sale Jan. 9, stating it would close the newspaper if it couldn’t find a buyer in 60 days.
The Associated Press contributed to this report.
