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Some good news...
Doug Ray, CEO of Paddock Publications, publisher of the Daily Herald, issued a staff memo this week titled "Expense reduction plan." Ray began by surveying the economic landscape. He said newspaper publishers, including Paddock, "have not escaped what is the most significant economic downturn since the Great Depression and as a result are being jolted by worsening declines in advertising revenue. . . . The Federal Reserve itself forecasts the economy will contract well into 2009."
What this means at Paddock is "ongoing expense discipline in all areas and additional cost reductions overall...Effective December 14, the work week for all Paddock Publications employees will be 37.5 hours. This will result in further wage reductions for all staff and is in addition to the current one-day-per-financial-period furlough."
But this alone will not be enough, Ray went on. So Paddock is looking for volunteers to take buyouts. If enough (Ray didn't give a number) don't come forward by early January, then "involuntary layoffs" will follow, at harsher terms (half a week's pay for every year of service, up to 13 weeks, rather than the week's pay per year's service up to 26 weeks offered volunteers).
It sounds pretty bleak. But Ray said performance raises will continue to be awarded, and he described Paddock's troubles as a long, dark tunnel but not an endless black hole. "All this is extremely difficult," he said, "but know that these cost-savings plans are essential to maintaining the viability of the company. We expect 2009 to be the most challenging year in memory, but as has always been the case, it too will pass as the economy returns to normalcy. We, of course, have no way of knowing when that will take place, so these initiatives not only preserve the company but position it to grow and are essential to maintain our position in a changing Chicago area media market."
Given the state of the newspaper industry across the country and locally -- the owners of the Reader and the Tribune are in bankruptcy, and the Sun-Times Media Group is a penny stock being deregistered with the SEC -- Ray's notion that this, too, will pass is refreshing optimism.
Want even better news? Here, thx Gawker, is a staff memo this week from John Sargent, CEO of Macmillan publishers, announcing that "retail book sales are down, advertising revenues are down, and even countercyclical businesses like education are struggling in many cases. We are not immune to these forces, and our business continues to be soft."
So Sargent announced a salary freeze, but he said it won't include everyone. What's more, the company will keep contributing to the employees' 401k plan. Oh, happy day.