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Topic: Memos Sent to Romenesko
Date/Time: 6/27/2008 6:12:16 PM
Title: More bad news at BANG-East Bay
Posted By: Jim Romenesko
 
From: Armstrong, John
Sent: Friday, June 27, 2008 2:59 PM
To: &EB All
Subject: IMPORTANT ANNOUNCEMENT

Colleagues:

As you all know, we are not immune to the financial challenges facing the economy in the East Bay and the newspaper business in general.

We have just completed work on our budget for the fiscal year beginning July 1. We are forecasting a 10% drop in revenue over the next 12 months, which comes on the heels of a 17% revenue decline in this fiscal year. In my nearly five decades in this business, I’ve never experienced a downturn so deep and so broad.

Given this continued erosion of our revenue base – coupled with a more than 20% jump in the price of our most expensive commodity, newsprint – we found we had no choice but to take additional steps to sharply reduce our operating costs.

Consequently, I write to let you know we have started a significant restructuring of our operations, including employee layoffs from the management and staff ranks in all divisions and other changes to bring our overhead in line with lower revenue.

The employees subject to layoffs today were notified individually. Also, we sent a letter to the Media Workers Guild requesting a meeting to discuss our intention to lay off, on July 11, approximately 29 newsroom employees.

You will recall we achieved a reduction in our workforce in March through a buyout program. At the time we hoped that our revenue base would stabilize and additional job cuts could be handled through natural attrition.

Unfortunately, the decline in revenue accelerated in April, May and June, spurred by the prolonged real estate slump, its ripple effects on virtually all segments of the East Bay economy and the continuing migration of ad dollars to the Internet. When it became obvious that another reduction in workforce was unavoidable, we concluded we could not utilize buyouts this time because we needed to move quickly and we could no longer accommodate the randomness of buyouts.

In making the decisions on which jobs to eliminate, we were guided by three objectives:

Protect the core strength of our franchise, which is local news and information.
Maintain advertising sales presence in the markets we serve.
Minimize the impact on our web sites and other digital services.

These are difficult times to be in the newspaper business. We are building audience and ad sales on the Internet, but our digital growth is far short of the level needed to offset our print losses. We’ll get to that point, but the transition is proving to be challenging and at times painful.

We are losing quality people in our organization, which is sad and unfortunate. We wish them every success in their new endeavors. I ask those of us who remain to roll up our sleeves, renew our commitment to our mutual goals and aspirations and support each other as one team moving forward.

John

John Armstrong
President and Publisher
BayAreaNewsGroup-EAST BAY
Vice President
California Newspapers Partnership

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