Paper Cuts

As newspaper industry bleeds, Enquirer tries to hold on

Readers will be getting less news and locally produced content in their morning copy of The Cincinnati Enquirer beginning later this month, as the newspaper scales back both its size and the number of people it employs.

Prompted by the troubled U.S. economy, Greater Cincinnati’s only remaining daily newspaper laid off several employees Dec. 2 and 3 under strict orders from its owner, Gannett Co. Although the number of layoffs wasn’t disclosed, at least 30 people — including 13 in the newsroom — were let go, sources say.

Those departures are in addition to the voluntary severance packages The Enquirer’s management approved for 60 staffers from various departments in September, including 15 from the newsroom.

Further, The Enquirer’s “newshole” — the amount of space allocated for content other than advertisements — will be reduced by six pages on Sundays and a total of 30 pages across the other weekdays beginning the week of Dec. 28, says Editor Tom Callinan.

The reduction most likely will be accomplished by eliminating the newspaper’s separate Life section, once known as Tempo, and folding it into the Local News section. The Enquirer already eliminated its stand-alone Business section last year as part of cost-cutting moves.

Despite the reductions, Callinan says Enquirer staffers will strive to ensure the changes don’t hamper overall quality.

Asked if the changes would negatively impact its readers, Callinan replies, “I hope not. We are trying to be very strategic and smart about reconfiguration — tighter, more densely-packed.”

In late October, Gannett executives gave editors throughout the newspaper chain about two weeks to devise plans for “an involuntary staff reduction of approximately 10 percent” at each outlet. Employees who were terminated would receive one week of severance pay for each year of service with a cap of 26 weeks.

With a 10-percent goal, at least 3,000 people would have to be laid off given Gannett’s roughly 30,000 newspaper division employees nationwide.

‘I knew this day was coming’

Faced with a tumbling stock price and a sharp decline in advertising revenues, the layoffs are just the latest in a series of actions taken by Gannett to retain its profit margins. Last summer, the media chain froze its pension plan benefit for employees.

Based in Virginia, Gannett is the largest newspaper publisher in the nation. It owns 85 U.S. daily newspapers including The Enquirer and USA Today, along with about 1,000 non-daily publications (including the Community Press and Recorder weeklies in Greater Cincinnati) and 23 TV stations.

Although Callinan wouldn’t identify specific people who were laid off, multiple sources at The Enquirer confirm that 13 employees were affected in the Editorial Department: Copy Editor Randy Allen; Graphic Designer Ron Cosby; Multimedia Initiatives Director Liz Foreman; Blue Ash Bureau Chief Dianne Gebhardt-French; Assistant Local News Editor Elliot Grossman; Senior Graphic Designer Ron Huff; Photo Editor Eileen Joyce; Copy Desk Chief Kathy McDermott; Assistant Editor Steve Morrison; Business Editor Carolyn Pione; Features Copy Editor Kathy Schwartz; Copy Editor Linda Shaw; and Calendar Listings Editor Rasputin Todd.

Also, sources say about 20 people were laid off in the Circulation Department, which is responsible for home delivery and single-issue sales of the newspaper. Such a move would comply with Gannett’s increasing push to de-emphasize the daily print edition in favor of enhancing its Internet presence.

Still, if the 10-percent goal set by Gannett is firm, about 95 people from The Enquirer’s roughly 950 employees might have gotten the axe.

Although many other Gannett newspapers chose to issue memos to their employees detailing the layoffs — and in some cases publish articles to inform readers — The Enquirer didn’t share its total number either internally or externally.

“We reported the layoff a few weeks ago in the Business section but we did not repeat the news,” Callinan says. “It would only fuel speculation about individuals, which we would not get into.”

Grossman, one of The Enquirer’s laid-off workers, says he wasn’t surprised when told that he was among those slated to go. This round of layoffs was designed to focus on mid-level managers, he adds, and he had the least seniority on his editing team.

“I’ve known for years that the state of the newspaper industry was declining,” says Grossman, who’s spent 2 1/2 years at the newspaper, most recently as weekend news editor. “Twenty years ago, I knew advertising and circulation were declining, so I knew this day was coming.”

In fact, newspaper readership has been declining for decades, but the drop has been hastened during the past few years as younger people increasingly turn to the Internet for their news, media studies indicate. Newspapers traditionally make their profit based on advertising and classified advertising, much of which have moved to Web-based platforms.

Recent financial problems with the stock market and the credit crunch might have provided the final nail in the newspaper industry’s coffin.

Just in the past few days, the Tribune Co., publisher of The Chicago Tribune and The Los Angeles Times, filed for bankruptcy. Also, The New York Times is considering selling some of its assets, which might include its New England newspapers like The Boston Globe, and reportedly is borrowing money against the value of its headquarters building in Manhattan. Further, the McClatchy Co., the nation’s third-largest newspaper chain, is trying to sell The Miami Herald to raise cash for its operations.

The bleak media landscape probably only will get worse: U.S. advertising expenditures are expected to drop 5.7 percent in 2009, according to industry analysts. And a report released last week by a credit ratings firm reveals several U.S. cities might not have any daily paper at all as soon as 2010.

Chicago-based Fitch Ratings reports that some newspaper companies are likely to default on their debt, have their assets liquidated and go out of business sometime next year, Editor & Publisher reports.

‘We will be back in the game’

At The Enquirer, managers took Grossman aside and informally told him about the layoff about three weeks ago to soften the blow, he says. Grossman, who has worked at various Gannett papers for 12 years, harbors no ill feelings.

Enquirer managers treated me with respect and courtesy as they eliminated my job,” he says.
Others, however, are less forgiving.

Several posters on the Gannett Blog have noted many of the company’s newspapers continued to post double-digit profit margins as recently as 2007. They include a nearly 14 percent profit margin at The Enquirer, nearly 25 percent in Indianapolis and 42.5 percent in Green Bay, Wisc.

Critics say the real culprits for the severe downturn are short-sighted management decisions, excessive executive compensation and a too-zealous pursuit of higher profits at the expense of all else.

“All the papers were profitable as of a year ago — except for the Detroit Free Press,” Jim Hopkins wrote on the Gannett Blog. “Since then, however, any number of Gannett papers may have become money losers this year after the housing bubble’s collapse and the nation’s dip into a recession.”

Jim McNair, a former senior business reporter at The Enquirer, says newspaper cutbacks are harmful to public welfare.

“The downsizing of newspapers is so replete that many neighborhoods, municipalities, institutions, companies, industries, disputes and controversies aren’t being covered at all,” he says.

McNair, who spent 29 years as a reporter at various papers including The Miami Herald, was fired by The Enquirer in August 2007, then received a buyout in an out-of-court settlement this past January. As part of the settlement, he can’t discuss The Enquirer but can comment on the industry.

“I believe that printed news publications can ensure their futures by settling on defendable niches and investing in first-rate talent,” says McNair, now a stock researcher. “To induce people to pay for and advertise in a publication, editors have to find compelling stories and present them in a creative, stimulating way, not in the stodgy inverted-pyramid style still in use today.”

Grossman, who begins teaching a media writing class at Xavier University next semester, believes print newspapers will be replaced with Web coverage and other formats yet to be developed. But solid news writing and reporting will always be needed.

“I would clearly advise college students not to go into newspapers,” he says. “If it is in their hearts to go into the news media, I encourage them to be flexible.”

For his part, Callinan recently posted on the Web that the layoffs mark The Enquirer’s ongoing transition into a “writer’s newspaper.”

Asked to explain, he replies, “It was a personal statement that it was painful to lay off middle managers I know very well. But we did not touch one hour of reporting, even good reporters that we just hired. Good stories are our last best hope.”

Unlike some others, Callinan thinks newspapers will rebound in time.

“This is more about economic and advertising trends than a systemic shift in the value of newspapers,” he says. “We are a leading indicator of the economy. When and if things get better, we will be back in the game big time.”

See Ben Kaufman's related On Second Thought media column here and John Fox's related editorial here.

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