McClatchy Co. has announced that it is axing another 1,600 jobs in a cost-cutting spree that has clipped nearly one-third of the newspaper publisher's work force in less than a year.
The company made the latest job cut announcement yesterday as it activated its plans to lower its expenses by as much as $110 million over the next year as its revenue evaporates amid a devastating recession.
The layoffs will start soon and already several of McClatchy's 30 daily newspapers, including The Sacramento Bee and The Kansas City Star, have decided how many workers will be shown the door.
With this recent cut McClatchy will have saved at least $300 million annually and the company management is now confident it will exceed the $110 million target set for the latest cuts, although the company didn't specify by how much.
McClatchy is also lowering the wages of many employees, including its chief executive, Gary Pruitt, whose salary is being trimmed by 15 percent. Labor leaders representing workers at The Sacramento Bee wanted a bigger reduction that would have capped Pruitt's salary at $500,000 this year. Pruitt received a $1.1 million salary in 2007.
"I'm sorry we have to take these actions, but we believe they are necessary," Pruitt said.
An approximate $2 billion debt compunded the downturn in McClatchy's fortunes. Most of the debt was taken on to finance the company's $4.6 billion acquisition of Knight Ridder Inc. in June 2006.
The newspaper industry has been suffering across the baord for a while now as ad revenue decline; in many cases classified ads have shifted to the Internet in recent years. On top of lost ad revenue, recession has been siphoning away more revenue in all ad categories since last summer.
McClatchy's stock has been largely abandoned by investors and shares declined 18 cents Tuesday to close at just 41 cents.