The Layoffs at the Mercury News
I had a number of phone calls and emails about the bombshells dropped at the San Jose Mercury News and Contra Costa Newspapers on Friday.
The Mercury News announced layoffs of up to 101 people and CCN announced that the editor there was “leaving the newspaper” because his position had become redundant. Copies of both announcement memos are below.
One of the most interesting emails was from Stephen Buel (who I think is a former SJMN journalist) of the East Bay Express. He passed on a piece from their online edition about what was going on with Media News in Northern California. It included this comment:
“The announcement (of layoffs at the Mercury News) was seen by employees as a shot across the bow of the unions currently in contract talks with the newspaper.”
The New York Times story below includes a similar comment from Mark Schwanhausser, a reporter at the Mercury News. Mark suggests that the announcement may be a negotiating tact, since the Guild is currently negotiating a new contract.
“We’re trying to separate the scare tactics from the ‘wake up, your industry is imploding’ tactics,” he said. “Negotiations are a poker game. We recognize we have a weaker hand than we’d like, but I don’t want to lose on a bluff.”
I am sure that getting the unions’ attention is part of the reason for this move right now. But I do not think that is the major driver behind this layoff announcement.
My take, and than of several of my far-flung correspondents, is that the layoffs have more to do with the inability of the Mercury News to achieve its profit goals without cutting staff. A couple of people who have direct experience with Dean Singleton tell me that his world is really very simple. He sets the profit goals for his newspapers. He expects the leadership at the newspaper to make the goal. If they cannot make convincing revenue projections that show them making the goal the deficit has to be made up by cutting expenses. If there are not enough non-salary expenses that can be cut jobs have to be eliminated.
Failure is not an option.
The Guild’s response to the layoff announcement is below. It reveals the details of the cuts as follows:
“The Mercury News provided the following breakdown of cuts in Guild positions: editorial (37) advertising (18), finance (4), creative services (3), circulation (3, including one not currently filled), PBX (2), production (1) and marketing (1, currently not filled).
“Non-Guild cuts would include: circulation (7), editorial (4), advertising (3), typographical (3), HR (2), marketing (1) and the remainder in production and IT.”
The Guild’s response so far is quite mild. This may be because the language in the Mercury News Guild contract about layoffs is unusual and gives the company latitude to decide who to layoff. Most union contracts have a very simple formula to decide who gets cut in a layoff—last hired, first fired. But at the Mercury News seniority is only one factor that is considered.
Here is typical language about layoffs from the contract for the Santa Rosa Press Democrat:
ARTICLE XIV - JOB SECURITY
(d) Dismissals to reduce the force shall be imposed in the reverse order of the length of service with the Employer.
Compare that straightforward statement to this from the Mercury News contract:
ARTICLE XIV - SECURITY
(j) Reductions in Force.
The Employer shall notify the Guild in writing of the intention to effect any dismissals for economy reasons, stating the number, classifications and departments of jobs affected, and providing, in such notice, seniority lists showing the employees in the classifications and departments affected, their length of service with the Employer and their length of service in the classification and department. The Employer shall in making discharges for economy reasons, give due consideration to such factors as general competence, qualifications, and ability to do the available work, and consideration will be given to the factor of length of service.
With language like this company is in a position to evaluate every Guild employee, giving weight to all of the factors cited in the contract, to decide who is included in the layoff. The Guild will surely attempt to fight back, but they are not in a strong position.
I have not read the contracts for the press operators, composing, mailroom and various teamsters units at the Mercury News but I suspect they all call for last hired, first fired in the event of layoffs.
A couple of more comments:
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I am a little surprised that the events of the last year have not sunk in better than this.
Knight Ridder was sold and broken up. The Tribune Company is deciding how much of the company to sell to whom. There has been speculation that the New York Times should sell the Boston Globe, or maybe the whole company. A British financial publication wondered if Gannett would be the next target.
With all of this going on I would have thought that everyone would understand that newspapers are a business and that the owners set the expectations for profit, which are always higher than the workers think they should be.
Here are the memos and media reports cited above.
Friday, October 20, 2006
20 Oct 2006
Statement from the Guild bargaining committee
San Jose Newspaper Guild
From: The Guild Bargaining Committee (Becky Bartindale, Mary Anne Ostrom, Dennis Uyeno, Nick Warner, Barry Witt, Suzanne Arnaud, Darren Carroll and Luther Jackson)
This is in response to the Mercury News’ warning today that — without sufficient expense reductions — it could eliminate 101 positions by December 19. Of those, 69 would be Guild-covered positions, according to the paper.
The Guild Bargaining Committee is certainly aware of the economic situation of the paper and the industry. Over the past two months, we have been negotiating with the Mercury News to achieve a contract settlement that makes it possible to continue attracting and retaining top-notch employees while helping the paper prosper.
That said, we are very concerned about the impact of further cuts on our members and their families as well as the paper itself. Such reductions will make it very difficult for the Mercury News to provide our readers, advertisers and the entire community with the quality newspaper and website they expect. Without a quality product to sell, future revenue growth will never be achieved.
We are disappointed that MediaNews, a private company, is falling into the same trap as Knight Ridder, reacting precipitously to quarterly results by taking steps that will further diminish our newspaper.
Since 2000, Guild membership ranks have dropped from 820 to below 500 today. If these reductions went through, the newsroom will have dropped in one year from about 350 to about 240.
The Mercury News provided the following breakdown of cuts in Guild positions: editorial (37) advertising (18), finance (4), creative services (3), circulation (3, including one not currently filled), PBX (2), production (1) and marketing (1, currently not filled).
Non-Guild cuts would include: circulation (7), editorial (4), advertising (3), typographical (3), HR (2), marketing (1) and the remainder in production and IT.
Please be assured that we will work together to achieve a contract that supports you and your families and continues to make the Mercury News an attractive buy for readers and advertisers.
As always, we are available to meet with Guild members individually or in mobilizer groups.
From the East Bay Express
October 20, 2006
Firing at CoCo Times; Layoffs at Merc
If there are any lingering doubts that the new owner of virtually every major East Bay and South Bay newspaper intends to radically remake its properties, Friday’s news should change that. Contra Costa Times Editor Chris Lopez was relieved of his duties in a move related to the merger of the Times into the family of papers that includes the Oakland Tribune, Tri-Valley Herald, Argus of Fremont, and Daily Review of Hayward. Executive Editor Kevin Keane will assume his duties. Far more significant was the news from out of the sister San Jose Mercury News, where publisher George Riggs alerted his staff that 101 employees will be laid off sixty days from now. The announcement was seen by employees as a shot across the bow of the unions currently in contract talks with the newspaper. On the heels of other recent announcements, the developments seem to herald a significant downsizing across many or all of the company’s dozens of Bay Area papers.
Company employees, speaking under the promise of anonymity, see the layoffs at the Merc as the likely first act to a similar reduction in force at the Times and possibly also the company’s long-time East Bay papers. “The general feeling around here is that the hammer is coming down here soon too,” said one ANG employee. Indeed, Riggs, in his memo, warned archly of “continued declines in revenue” that these days afflict most daily newspapers and many other old media properties.
Article continues at length on the East Bay Express website.
From the New York Times
October 21, 2006
3 Former Knight Ridder Newspapers Plan Layoffs and Other Staff Reductions
By KATHARINE Q. SEELYE
The new owners of three former Knight Ridder newspapers announced layoffs, expected layoffs and abrupt changes in management yesterday as they painted a bleak outlook for the newspaper industry.
The San Jose Mercury News said it planned to lay off 101 people from its work force of 1,260 employees. The cuts are to include 40 workers from the 280-member newsroom. …
… Mark Schwanhausser, 47, a reporter who has worked at the Mercury News for 24 years, said that previous job cuts at the paper were made through buyouts, not involuntary layoffs. He said he thought such layoffs were inevitable because Mr. Singleton has been eager to move his newspapers away from print and toward the Internet and because no one had figured out how to sustain a print staff on the small revenues from the Internet.
Still, he said, some people questioned the timing of yesterday’s announcement.
“We’re trying to separate the scare tactics from the ‘wake up, your industry is imploding’ tactics,” he said. “Negotiations are a poker game. We recognize we have a weaker hand than we’d like, but I don’t want to lose on a bluff.”
Story continues at length on the New York Times website.
The announcement email from the Mercury News
From: Riggs, George
Sent: Friday, October 20, 2006 1:11 PM
To: ALL
Subject: Staff ReductionsOctober 20, 2006
Dear Colleagues
A few weeks ago, I wrote to everyone about the challenges our business faces, both over the past six years and going forward. Since then, our business outlook has worsened and we have completed our budgeting process. Given continued declines in revenue, we need to reduce expenses significantly, and thus have no alternative but to implement a reduction in work force.
We plan on eliminating 101 positions by December 19th. The process of identifying individual employees subject to layoff is not yet complete. Under California law, if an employer lays off fifty or more employees within a thirty day period, it is required to provide the affected employees with sixty days advance notice of the layoff. This is known as a “WARN notice.” Since our planned reduction involves more than fifty employees, we are providing employees who may potentially be affected with the required WARN notice. Please understand that employees who are potentially affected include all employees in those departments where layoffs are necessary. However, not every potentially affected employee receiving the notice will ultimately be subject to layoff. But in order to meet compliance requirements, notice will be given to a larger number than the 101 employees.
There are some things that could favorably impact layoff plans should they occur. Any significant upturn in advertising revenue would, of course, have an impact. We are seeking additional commercial print work, which would also increase revenues. We are working with our production unions (Pressmen, Mailers and Drivers) to be better positioned to accomplish this. Price reductions in newsprint have been rumored recently, and could lead to expense savings should they occur. Lastly, we have three open union contracts we are negotiating (Guild, Composing and Pressmen) and, depending on the outcome, they may also lead to further expense reductions. All of these could reduce the ultimate number of positions eliminated.
I understand the uncertainty these staffing cuts create for everyone, and deeply regret that we have to take this action. Please know that we would not do so unless it was absolutely necessary to ensure the future viability of our newspaper.
Sincerely,
George Riggs
The Contra Costa Newspapers announcement, copied from Romenesko
Topic: Memos Sent to Romenesko
Date/Time: 10/20/2006 5:58:54 PM
Title: Lopez departs as Contra Costa Times editor
Posted By: Jim Romenesko
Subject: ANNOUNCEMENT
Date: Fri, 20 Oct 2006 13:08:01 -0700
From: [Contra Costa Times publisher] John Armstrong
To: [Contra Costa Times staff]
Colleagues:
The single most difficult duty I have is to bid farewell to a valued colleague and friend, and this I must do now. Chris Lopez, a 6 and 1/2-year member of the Times news staff who became editor 23 months ago, is leaving the newspaper. Our executive editor, Kevin Keane, will assume Chris’s day-to-day responsibilities, effective immediately.
As we consolidate the operations of Contra Costa and ANG newspapers in the Bay Area, there are some positions that become redundant, and, unfortunately for Chris, his is one of those positions. In better times, we might have found a way to ignore an extra position or two or even three. But given the serious revenue pressures all newspapers are facing, about which I wrote to you this week, we cannot afford any redundancy, especially at the senior management level.
Chris has been a superb editor. When he succeeded me as editor nearlytwo years ago, we talked about pushing on investigative reporting and community coverage and involvement, and he and the news staff delivered in spades. I am indebted to him for the energy and dedication he brought to his service as editor.
Please join me in wishing Chris, MaryAnne, Katie and Eva every happiness in the years ahead.
Fortunately, Kevin Keane is well suited to assume the reins at the Times. Twenty four years ago he began his journalism career as a reporter in the Philadelphia area. He has served MediaNews as an editor for nine years, most recently as VP of News for ANG Newspapers.
I know I can count on all of you to give your full support to Kevin.
For those of you in the newsroom who would like to ask questions of Kevin and me, we will be available in Room 202 at 4 p.m. today.
John Armstrong
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