Tribune Co to restructure by eliminating 700 jobs
21 Nov 2013
Tribune Co, owner of The Chicago Tribune, will eliminate 700 jobs over the next year as part of its restructuring plan to stem losses from the continuous decline in revenues from print advertising.
The job cuts comes a year after Tribune Co eliminated about 800 publishing positions. As of June, its publishing unit had 8,487 full-time employees.
The restructuring plan outlined through memos to employees at its publishing division, involving 6 per cent reduction in staff over the next year, will come mostly from operations.
Reporters and editors at its eight daily newspapers will not face the brunt of the job cuts for now.
"Over time, there will be some small reductions in editorial staff, but the majority of these reductions are going to come from non-reader-facing functions," said Peter Liguori, Tribune Co's chief executive.
Liguori said the restructuring plan will offset projected revenue shortfalls in 2014 and beyond, which will allow the publishing division to allocate more resources to its long-term digital future.
"This change in organisation and operation clearly addresses it, gets ahead of it and gives us the best possibility to create runway to create our new future," Liguori added.
Tribune Co, which plans to now focus on its television stations business, will merge its units like advertising, marketing, manufacturing and digital media under one top executive.
Tribune Co, which emerged from Chapter 11 bankruptcy in December last year, owns 23 television stations, excluding the 19 local television stations it proposed buying in July from Local TV Holdings owned by Oak Hill Capital Partners for $2.73 billion. (See: Tribune Co to buy 19 local television stations from Local TV Holdings for $2.73 bn)
Tribune Co is preparing to spin off its newspaper division into a separate company. The newspapers include The Los Angeles Times and The Chicago Tribune. The Tribune Company owns The Baltimore Sun, The Hartford Courant, The Orlando Sentinel, The Sun-Sentinel, The Morning Call, and The Daily Press.
It announced the spin off plan in July, seven months after emerging from bankruptcy and has also been exploring the possible sale of its newspapers since February. (See: Tribune Co hires investment bankers to explore sale of newspapers)
Advertising revenue for the whole of the US publishing industry has plunged by 55 per cent since 2006, and is expected to further drop in 2014.
The newspaper industry in the US has been on the decline due to advertisers shifting preferences to online advertising. Advertising revenues across the newspaper industry have fallen from $49.4 billion in 2005 to $23.9 billion in 2011, according to the Newspaper Association of America.
Advertising revenue at the Tribune Co declined by $84 million last year, and publishing ad revenue was down $62 million through the first nine months this year.
