Word from the still on-going meeting Star Tribune publisher Par Ridder is holding in the paper’s jam-packed assembly room-cafeteria is that Avista Capital Partners will cut approximately 50 more newsroom jobs within the next two weeks through an enhanced buy-out plan. The plan will compensate employees two weeks for every year of service up to a new maximum of 52 weeks, plus an additional six months health insurance coverage.
The paper announced on its intranet service that it will seek 145 job cuts from the company as a whole.
Gallows humor was abundant as Ridder trotted out essentially the same “Business Literacy” computerized slide show he gave last year at the St. Paul Pioneer Press. This is the one where all indicators point down, except of course executive compensation and shareholder value.
Another story making the rounds this afternoon is a sighting of Ridder out for his morning jog this AM … wearing a St. Paul Pioneer Press t-shirt.
Ridder’s note to the Strib staff:
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>Employee Meeting Recap
>by Par Ridder, Publisher and CEO
>May 7, 2007 – At an all employee meeting today we announced that as part of our ongoing efforts to reduce costs, the Star Tribune will be reducing the workforce by about 145 employees, primarily through a voluntary buyout program. I want to summarize some of the key points from the meeting that give context to this decision. The Star Tribune is in the same situation as most other metropolitan newspapers across the country. Our revenue has been declining for two years now, while expenses have been increasing. Our performance for the first quarter of 2007 was much worse than we anticipated, and there are signs that this trend will not reverse soon. Our revenue decline is primarily due to a steep drop in Classified advertising. We are facing both weak markets in real estate, automotive and employment and a migration of advertising in these categories from print to online. Declining revenue and increasing expenses mean that our profit has dropped substantially these past two years. For us to be a healthy, viable business, we must stabilize this situation-first by getting our costs in line with our revenue. Our costs fall into three main areas: compensation, newsprint and all other. Compensation is by far our largest expense category. In addition to other efforts being made to reduce costs, we have determined that we will need to go down about 145 jobs this year in order to achieve the necessary expense reductions. While we will be looking to reduce newsprint and all other costs as well, we are now faced with the necessity of having to reduce our workforce. Most other major metropolitan newspapers around the country have already taken this step. The senior vice presidents and I have put together a plan that seeks to get the majority of these reductions through voluntary buyouts. Those who are eligible for this voluntary program will be notified. However, if we do not get enough volunteers, we will have to move to layoffs to get the necessary reductions. There also are some job eliminations in this plan. It’s important to understand that our business model has fundamentally changed. This is not a temporary situation but a major shift in the media environment that we will be wrestling with for years to come. As I mentioned in the meeting, dismantling a newspaper is not a strategy. However, cutting costs will allow us to stabilize our business as we work to reallocate resources so we can get the Star Tribune growing again. This summer we will be having all company meetings to create our strategy going forward. Everyone will be invited and I encourage you to attend. From the ownership change to the change in leadership and finally this announcement, this clearly has been a tough few months for everyone. Thank you for your professionalism and hard work as we navigate this difficult time.
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