Declining revenue, banks to blame
Tribune Co. will shed 400-500 jobs in its publishing division and corporate offices during the next few months as it comes to grips with declining revenue at its newspapers and the tight leash imposed on the newly privatized company by the banks that carry its debt.
The cuts announced Wednesday will include about 100-150 positions at its flagship Los Angeles Times and Chicago Tribune newspapers.
The downsizing marks an about-face for Tribune Co.’s new CEO Sam Zell; in recent weeks, he had been highly critical of the previous management’s focus on cost-cutting and downsizing as a means of hitting revenue targets.
Zell, who’s also raised eyebrows throughout the company for his use of salty language and provocative remarks made during recent town hall style meetings with employees, acknowledged his past statements about the short-sightedness of cost-cutting but said the company’s worsening revenue picture left him no choice but to implement deep staff cuts.
“Unfortunately, I can’t turn this ship from its course of the past 10 years within just a few months,” Zell wrote. “Further, while I will do everything in my power to drive, pull and drag this company forward, I can’t promise we won’t see additional position eliminations in the future if we continue at our current rate of cash flow decline.”
Through the third quarter of last year, Tribune’s cash flow was down 12% from the same period in 2006.
Zell told employees that the company was looking hard at trimming excess in administrative areas such as support, human resources, finance and technology. He said the cuts would be handled through a combination of buyouts, layoffs and elimination of open positions. Cuts at the Times and Tribune will be determined by the top managers of those papers, Zell said.
“We are creating a flatter organizational structure, eliminating layers of personnel that inadvertently created bureaucracy. The result will be a streamlined culture that accelerates our decisionmaking and enables us to act quickly,” he wrote.
L.A. Times publisher David Hiller told staffers in a memo that details of the downsizing on Spring Street will be forthcoming by Monday.
(The Associated Press contributed to this report.)