NYT plans buyouts, layoffs if necessary to cut 100 newsroom staffers
The New York Times plans to cut about 100 jobs from its newsroom, Ravi Somaiya reports. "We hope to meet this number through voluntary buyouts. But if we don’t get there we will be forced to do layoffs," Executive Editor Dean Baquet says in a note to staffers (below).
In addition, it's shutting down its NYT Opinion app, and while Publisher Arthur Sulzberger and New York Times Co. CEO Mark Thompson call the app NYT Now "terrific," they say "our effort to define and market a lower-priced subscription offer on the web and core apps has proven much less successful." It will become a smartphone-only product "aimed at new and younger audiences and we’ve already begun to test other, more intuitive lower-priced subscription offers."
The headcount is up to about 1,330 people, Somaiya reports, up from 1,250 last year. "Some of that growth is a result of adding jobs for digital efforts, like web producers and video journalists," he writes.
Thompson and Sulzberger say the cuts are coming to "safeguard the long-term profitability of The Times, not because of any short-term business difficulties." They expect 16 percent growth in digital advertising this quarter and overall advertising to be "roughly flat" (this is what passes for good news about advertising these days).
They also "estimate that we will have added more than 40,000 net new digital subscribers" and "modest growth" in circulation revenues. But operating costs are up, a "reminder that the combination of the continuing secular pressure on our high margin print advertising revenue and the need for investment in the future is impacting our profitability and for this reason, we are now focused on cutting our costs."
The Times has cut staffers several times in the past decade. In early 2013 it offered buyouts and had to lay off "far fewer people than we anticipated" to eliminate 30 jobs, then Executive Editor Jill Abramson told staffers.
Here's Baquet's note to staff:
To the Staff,
In a letter to the company this morning, Arthur and Mark described the financial conditions that are forcing us to make cuts across the company. While there are promising signs in digital advertising and digital subscriptions, the print business remains under pressure. And our new products are not achieving the business success we expected, even though they are journalistic sensations.
So, regrettably, we are going to have to reduce costs in the newsroom. The masthead and I will be looking for every possible way to do this without harming our stunning report. I will use this as an opportunity to seriously reconsider some of what we do --- from the number of sections we produce to the amount we spend on freelance content.
But there is no getting around the hard fact that the newsroom will have to lose 100 jobs. We hope to meet this number through voluntary buyouts. But if we don’t get there we will be forced to do layoffs.
The buyout packages are generous especially for people with decades of service.
If you are represented by the Guild, the terms of the buyout offer have been established by negotiations and agreement with the Guild. Generally, you will receive three weeks of salary for every year worked at The Times, with the potential payout capped at two times your annual salary. In addition, The Times is offering a cash payout of 35 percent of the total severance amount to staff members who have been at the company for 20 years or more. If you are interested in considering a buyout please contact the Guild directly or Erika Sommer in News Administration to receive more information. All requests must be made by Oct. 17 at 5 p.m.
If you are an excluded employee, you are eligible for two weeks of salary for every year worked at The Times with the total capped at one year’s salary. Excluded employees who have been at The Times for 20 or more years are also eligible for an additional cash payout of 35 percent of severance. In the coming days we will mail buyout packages to all excluded employees who have been at The Times for five years or more.
I will reserve the right to say no to people who request a buyout but whose jobs and talents are critical to our mission. Obviously, if we are forced to turn to layoffs, those people affected will not get these enhanced buyouts.
Some of you will find that this offer works for you and your family. I recommend that everyone take this opportunity to have a frank talk with his or her supervisor about whether their goals match those of The Times.
I know how painful this is for all of us, especially since we have been through numerous rounds of buyouts and layoffs. But it is no secret that our entire business is facing continued rough times, and we’ve weathered them better than most, preserving a large and strong newsroom. Our colleagues on the business side have seen even bigger cuts over the past 10 years.
This is a transitional period for The Times. We are accelerating our efforts to build a powerful digital news operation while producing the premier print newspaper that our readers continue to embrace.
Even as we make cuts in some areas we must and will continue to invest strategically. In the coming months, we will work to find and engage new audiences for our journalism. We will also redesign the magazine, create new journalistic features like the Upshot and First Draft, and adapt our journalism to a world where an increasing number of readers find us on mobile.
All of these efforts depend on the continued excellence of our written and visual journalism. And you have my word that even as we are forced to make cuts, we will not stint on our mission. When we come out of this, we will still have the biggest, most ambitious newsroom in the business.
There is no magic bullet for the current financial plight of the news business. But the journalists of The Times, with all of their creativity and belief in the future, have helped guide this company through even more turbulent times. Many of the big successes of past generations --- the National Edition, the creation of new feature sections in the 1970s --- were pushed by a newsroom willing to change and adapt. We are in that kind of moment again.
I’m clearing my schedule for the next few days so that I can meet with any department that wants to talk as a group. Feel free to reach out to me, Matt, Janet, Ian, Susan, Tom and other senior editors.
Here's Sulzberger and Thompson's note:
We wanted to update you on some news – about our strategy and our new products but also, regrettably, about the need for a number of buyouts and layoffs across the company. The job losses are necessary to control our costs and to allow us to continue to invest in the digital future of The New York Times, but we know that they will be painful both for the individuals affected and for their colleagues.
The reduction in positions will vary across the company. In some parts of the business side, previous rounds of job cuts have been so great that the scope for further headcount loss is marginal, but there will be job losses in some departments and we will be offering buyouts to senior managers (those in bands 1 & 2) in the print, digital and advertising divisions. More specific information about jobs in each area of the company will be provided by your managers very soon.
We are reducing the cost base of the company to safeguard the long-term profitability of The Times, not because of any short-term business difficulties. For some perspective, we want to update you on the quarter that ended this past Sunday, which we expect will reflect some significant progress, as well as some continuing challenges.
Boosted by Paid Posts, growth in smartphone and video, and the energy and commitment of our advertising team, we expect digital advertising to show approximately 16% growth in the quarter, the best quarterly performance since 2010. Print advertising is notoriously volatile and the third quarter was no exception, with weakness in July and August followed by a more robust September. The combination of that September rally and the marked growth on the digital side means that instead of the “mid-single digit decline” we predicted, total company-wide advertising revenue is expected to be roughly flat in the quarter.
We also made progress in digital subscriptions in Q3 and estimate that we will have added more than 40,000 net new digital subscribers, the largest number of quarterly additions since 2012, with a higher proportion of new core subscribers than in the previous quarter and an encouraging number of new international subscribers. Accordingly, we now expect modest growth in the quarter in our total circulation revenues.
However, our operating costs will be up in Q3 in the low- to mid-single digit percentage range (excluding severance) and as a result, our profitability for the quarter and the year as a whole is still expected to be lower than last year. This is in line with our previous guidance to the market, but it’s a reminder that the combination of the continuing secular pressure on our high margin print advertising revenue and the need for investment in the future is impacting our profitability and for this reason, we are now focused on cutting our costs.
As we embark on these cost reductions we recognize that we must preserve and in some cases develop and expand the activities and capabilities on which future growth depends. As a result, we will largely exclude some critical areas like digital technology and core products from the reductions and we will invest heavily over the coming months on initiatives that support our growth strategy. These include mobile, audience development, our digital product portfolio, advertising and targeted areas of print.
Let’s turn to what lies ahead. We remain committed to our core strategy of growing our long-term revenues and profits by building on the talent of our journalists and the reputation of The New York Times and making a successful transition from a print to a digitally focused business model. Building a strong portfolio of digital offerings is a key part of this strategy. Despite the strong third quarter for digital subscriptions, we recognize that our suite of products and offers needs further development.
NYT Now is a terrific app and has struck a chord with younger users, many of them entirely new to The Times. However our effort to define and market a lower-priced subscription offer on the web and core apps has proven much less successful. So we’ve decided to split those two efforts. We will continue to back NYT Now as a smartphone-only product, aimed at new and younger audiences and we’ve already begun to test other, more intuitive lower-priced subscription offers.
NYT Opinion also attracted early passionate loyalists and it too broke new ground for The Times in the curation of the rest of the Web. We’ve learned some important editorial and design lessons from it that will be invaluable as we grapple with the continued challenges and opportunities of mobile. But, four months after the launch of the app, it hasn’t attracted the kind of new audience it would need to be truly scalable. So we’ve decided to sunset the app, though we will continue to sell access to the Opinion section of the Web site as a separate subscription offer.
As you all likely know, we took a different approach with Cooking, building awareness and usage of the product before consideration of a paid subscription model. We learned this week that by the end of September, just two weeks after its official launch, the product had more than a million unique visitors – a stunning achievement which bodes very well for Cooking’s future success.
Times Premier got off to a strong start and we’re now focusing more resources on improving and enriching the range and richness of the content available to subscribers of the product designed for our most committed readers.
We shouldn’t be surprised that we’ve enjoyed different levels of success with different products. They are all experiments, which we are determined to treat as such: to learn, pivot and, where necessary, make prompt decisions about them. We believe that this process of exploration and experimentation is essential to future growth at The New York Times and we will continue to support and fund it.
There are good reasons to be confident about the future of The New York Times: the undiminished quality of our journalism, our strong financial position, a brilliant executive editor with a formidable new leadership team, a clear strategy and – particularly thanks to the Innovation Report – a fresh impetus for change and experimentation.
Our present strength and future success both depend on your commitment to The New York Times and its mission. We thank you for all you do.
Arthur and Mark