October 23, 2007 in Business

S-R plans to cut staffing

By The Spokesman-Review
 

The Spokesman-Review intends to lay off about 30 employees and has offered early retirement incentives as the newspaper fights a struggling business model.

Publisher W. Stacey Cowles said Monday that several years of flat revenues including advertising and circulation sales are forcing cutbacks as costs continue to rise at the rate of inflation. He anticipates that the combination of layoffs and retirements will eliminate a total of about 40 jobs.

The newspaper is an approximately $60 million enterprise, though Cowles declined to discuss the company’s finances, including profits and the savings he hopes to achieve through staff reductions.

Editor Steven A. Smith said he has been asked to trim in excess of $1 million from a newsroom budget of more than $9 million. Of the company’s 550 employees, about 137 work in the newsroom.

The layoffs and early retirements will affect 10 to 15 journalists who write, photograph, edit and design the newspaper, Smith said. Newsroom salaries average $45,000 to $55,000 a year.

Cowles also plans layoffs in the circulation, marketing and prepress departments.

Smith said the well-documented troubles afflicting newspapers are frustrating an old industry that historically has outperformed many other industries.

In a memo to staff, Cowles said the newspaper’s best advertisers are losing the competition against companies that do not buy newspaper ads.

“Our best advertisers must compete against a huge number of stores and Web sites that do not advertise much if at all. … And when they lose sales, they cut their advertising with us,” Cowles said.

“We’re in a transition,” Cowles said, though “we’re unsure where it is to.”

Smith said he has not yet decided where to make cuts but acknowledged it will be noticeable.

“I won’t subscribe to the hogwash that we can do more with less,” he said.

The announcement was made one day before management and the Spokane Editorial Society, a bargaining unit representing about 100 hourly-wage journalists and support staff, begin wage negotiations for 2008.

Cowles Co. is a privately held media, forestry, newsprint and real estate conglomerate that spent a reported $41 million this month to buy five television stations in California, according to BIA Financial Network, a company that lists many large media concerns among its customers.

Cowles said the television buy, however, does not signal a clear change in direction for Cowles Co., now celebrating its 125th year of newspaper publishing.

“In many ways, television faces many of the same challenges of declining audiences,” Cowles said, adding that the company’s primary business lines right now are forestry and newsprint production.

Each Cowles Co. business line is run independently, Smith said, noting that the Spokesman-Review pays market rates for newsprint rolled at Inland Empire Paper Co.’s mill on Argonne Road.

The company already has cut space for news stories, held down pay raises and capital spending, and curbed travel and supply costs.

Payroll, however, is the highest expense.

“There’s no way to sugarcoat this,” Cowles said. “It won’t be easy.”

He expects the newspaper staff to continue to “put out a paper people will pay for and have delivered to their front porch every morning.”


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