And The Other Shoe Drops At Tribune

L.A. Times Will Eliminate "100-150 Positions," Job Cuts Across Tribune

by John Koblin | February 13, 2008
The New York Observer

Getty Images

The Los Angeles Times building.

As we documented this morning, there's a big divide over who should run the L.A. Times, and before Sam Zell and publisher David Hiller announce their choice, they're getting some dirty work out of the way: Job cuts are on the way.

Mr. Hiller writes that the paper will eliminate 100-150 positions at the Times, which includes ending open positions, and laying some off. Sam Zell writes in his own e-mail that he wants to add staff some day, but: "Unfortunately, I can't turn this ship from its course of the past 10 years within just a few months." Mr. Zell said there will be job cuts at all Tribune papers.

Here are their memos:

Folks,

As you'veve just heard from Sam, we are going to be eliminating some jobs at our newspapers and at Tribune corporate. As Sam related, the revenue picture continues to be bad, and well worse than was forecast at the time our going private transaction was completed. We had been planning to find savings over the course of the year, primarily through eliminating positions as they became open, but these current trends require that we act sooner.

So we will be undertaking a combination of steps to reduce staffing across all departments -- including eliminating open positions, a Voluntary Separation Program for eligible employees, and a limited number of layoffs. All in all, we will be eliminating in the range of 100-150 positions across The Times.

We knew we were going to have to go down some in staffing this year, so if there is anything positive here it's that we are able to accommodate some of the reduction through a voluntary program, and we'll also get this done now and hopefully clear our focus for the year ahead. We will be getting detailed information on these plans to you by this coming Monday.

I wish the year were starting with a more positive revenue picture, but the whole industry is facing the same thing and we have to be realistic in dealing with the situation we are in.

I appreciate your understanding and support.

David

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From: Talk to Sam
Sent: Wednesday, February 13, 2008 8:17 AM
Subject: Reducing staff

Partners,

As I have said repeatedly while on the employee road show, we will not achieve success by just cutting costs. Ultimately, our battle will be won by growing revenue, and by making Tribune Company a fierce competitor across all media channels print, broadcast and interactive.

I have also shared the reality of our significant debt levels and financial covenant obligations. These obligations require us to be more disciplined than ever with respect to managing our costs and maximizing the productivity of our assets and people. We need to constantly think and act like owners, and relentlessly strive to optimize the effectiveness of our businesses.

In my recent email about the ESOP, I outlined the assumptions we made in developing our projections for Tribune's financial performance going forward:

- Cash flow in line with that of 2007

- Newspaper revenues continuing to decline

- Broadcast and interactive revenues increasing.

While results so far in broadcasting and interactive are promising, we have not had time yet to realize these gains. Further, a weak economy and significant declines in advertising volume at our newspapers are putting downward pressure on our cash flow. These factors are forcing us to take immediate action, and are the basis for the sense of urgency you've heard me talk about so often.

It is within this context that I am announcing we must reduce the number of staff positions within the publishing group and corporate office through a combination of voluntary separation programs, involuntary layoffs, attrition and closing of open positions. Each of our newspapers is making its own decision about which programs best suit its needs.

Most of the affected positions are in support service areas, such as finance, HR and technology. 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 decision making, and enables us to act quickly.

I have discussed with many of you our mutual concern about the cyclical eroding of content quality to meet budgets manufactured in the corporate office. I promise you, in time, we will end that downward spiral. Right now, across the company, we're going through a zero-based budgeting process designed to let each business unit develop and be responsible for its own budget. This will make our financial planning and goals more realistic, allowing us to prioritize the work ahead and then staff accordingly.

Down the line we will likely be adding staff where there are opportunities for revenue growth. At the moment, we are still assessing the priorities and needs of our interactive and broadcasting groups.

Unfortunately, I can't turn this ship from its course of the past 10 years within just a few months. 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.

But, make no mistake. This is not my ultimate strategy for our company. I believe we can achieve greatness. I have staked my reputation on it.

Sam

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Hi All,

Well, here come the layoffs. I'm guessing that consolidation, outsourcing, and layoffs at the TV stations are next. Oh well, would you like fries with that?

BD