In Philadelphia, buyout offers show digital transformation is still a bloody business

Journalists at the Philadelphia Media Network got a memo from management on Monday about what's next for The Philadelphia Inquirer, the Daily News and Philly.com.

It includes the addition of 10 new digital staffers, with more hires to come, alongside a buyout offer that aims to cut between 30 and 35 from the newsroom.

"We have an editing and print production structure that can no longer effectively serve our changing needs," the memo read. "And we have some reporters, columnists and editors who have not adapted to the demands of digital publishing."

For a newsroom that recently went through reorganization, got a new ownership structure and was awarded $1 million for ambitious projects, it's a tough reminder that attempting digital transformation doesn't make a newsroom or the people who work there safe.  

"I think part of the distrust in the newsroom is we’ve been through this now so many times," said Howard Gensler, a staff writer and president of the Newspaper Guild of Greater Philadelphia, "and every year or two there’s a new general with a new plan and then a year later it’s October and we’re cutting staff because nobody’s made the numbers."

Economics are a big part of the buyouts offer, the memo notes:

Three unyielding realities are forcing these decisions.

1. The pressing need to invest in new platforms and new audiences. The restructuring this spring revealed critical roles that could not be effectively met with in-house personnel. Those roles are essential, and must be filled.

2. Print and digital advertising revenue continues to decline. The early performance of the meter and revenue growth in events and native advertising point to a sustainable business model for our journalism, but those initiatives are in their early days, and the new revenue is not yet sufficient to cover advertising declines.

3. Our news report must be credible, accurate, smart, and timely — but not just in print. Today, our work appears on an ever-multiplying array of platforms, from Philly.com, to our app, in syndication, within newsletters and on wide array of social platforms. This requires a different editing structure than we have today.

If the offers, which you can read more about here, don't bring in their targeted number of buyouts, layoffs will come next, the memo says.

"It’s the unfortunate perfect storm of people who've been doing this job for a really long time, are not quite old enough to retire and have a defined skill that’s unfortunately no longer valued," Gensler said.

Among the positions cut are the newsroom's multiplatform desk, which is in charge of copy editing, and photo production editor for print. Currently, about 80 people are in editing positions. After the cuts, between 60 and 69 should remain. The print coordinating desk will absorb some of those people.

"Digital and print advertising are challenged everywhere across the industry," Stan Wischnowski, executive editor, told Poynter this week.  "We’ve got crucial gaps to fill, and we simply need to tell our stories in different ways. We’re serving a much different audience. We need the talent to execute on that."

The newsroom went through a big round of layoffs in 2015, and this is different from that, Wischnowski and Gensler agreed.

"Part of what makes this frustrating for the newsroom and for us is in 2015 we laid off SEO people, now we’re hiring SEO people," Gensler said. "Before that, we laid off the video department, now we’re hiring a videographer."

And many of the people now at risk on the copy desk went for the multiplatform editing jobs during the recent reorganization because those jobs seemed safer than the print coordinating jobs, he said.

Similar realignments have happened at newsrooms around the country. The New York Times offered buyouts to copy editors in May, with the plan to move more resources to reporting. Last year, the Boston Globe offered buyouts to trim newsroom numbers before moving buildings and announcing a new digital strategy. Gannett and the USA Today Network cut across the company, aiming for about 210 jobs.  And McClatchy has taken a newsroom by newsroom approach to cuts as it works to makeover its newsrooms.

Philadelphia Media Network is owned by the nonprofit Lenfest Institute for Journalism, which recently gave out $1 million in grants for newsroom projects that include increasing the size of the investigative team, diversifying the newsroom (something ASNE's latest survey shows most newsrooms have to work a lot harder on) and getting the newsroom on a new CMS. (Disclosure: Lenfest helps fund Poynter.) 

Higher-ups at PMN might get excited about Lenfest, Gensler said, but “nobody in the newsroom thinks their life and job security has gotten better because of the institute.”

The newsroom has been through 21 months of transformation so far, Wischnowski said.

"We have made great progress. We can’t stop here. We’ve still got a lot of work to do to modernize this newsroom."

The new hires have skills the newsroom needs now, including an SEO editor and someone to work on newsletters and help bring in more digital subscribers. But he doesn't take it lightly that those new roles are coming in at the same time as the buyouts, Wischnowski said.

The process is meant to give everyone in the room the chance to evaluate the situation and see how they might fit into the newsroom's future.

It's an approach The Dallas Morning News took, too. What's happening now in Philadelphia looks very similar, said editor Mike Wilson. (Disclosure: Both Dallas and Philadelphia are part of the Table Stakes project. The Knight Foundation, which launched the project, funds my coverage of local news.)

"Our buyouts in 2015 were strategic. The strategy begins with a need to save newsroom costs, and there's no denying that," Wilson said. "At the same time, we’re trying to pivot to a different kind of journalism, and we needed to bring some new skills and approaches to our newsroom."

News organizations like The Dallas Morning News and Philadelphia Media Network have to be able to reach digital audiences, he said. That's the future. But when experienced people leave the newsroom, the community loses out with both coverage and some institutional knowledge, Wilson said.

"Journalism institutions are businesses that have to ultimately be able to support themselves," he said. "I’m sure, like us, Philadelphia is trying to be self-sustaining in the long term."

Oct. 5 marked the first full month of PMN's metered paywall. So far, Wischnowski said, they have 8,300 new digital subscribers, surpassing their first month goal times four.

That doesn't offset the print advertising declines. As with the rest of the industry, Wischnowski said, PMN has seen a gradual decrease in the number of copies sold.

“However, our pricing strategy has yielded increases in profitability in this area,” he said. “And that’s a credit to the high quality of our news report. We expect that our digital subscription model will add even more reader revenue.”

Like other newsrooms, they're working on several ways to bring in money, including events and a native ad team.

Gensler worries, though, that losing copy editors at the same time PMN is asking people to pay for content is the wrong way to go. Those subscribers tend to be more educated, more obsessed with the news, and they're the ones who nitpick mistakes, he said.

"It’s little things that diminish the credibility of the product with the people who are most obsessed with that product."

Everyone has their fingers crossed that the new approach will work, he said, but there's no evidence that the paywall will generate enough revenue in the short run to cover what print is losing.

Rick Edmonds, Poynter's media business analyst, wondered when the payoffs for better digital journalism are coming.

Journalists are getting mixed messages in the process of digital transformation, he said. On one hand, the work is urgent, and if you're not on board, the train will leave without you. On the other hand, the process is taking a really long time.

"Lord knows how long," he said. "To cut to the chase, how long does it take?"

 

Here's Philadelphia Media Network's full memo:

To the Staff:

We’ve come so far these last two years. We’ve effectively forged three newsrooms into one, successfully launched a meter, reimagined each desk and beat, learned new storytelling techniques, built a digital leadership team, experimented with new products, become more in tune with our audience and continued, as ever, to do outstanding journalism.

The pace of change will only accelerate from here. PMN is making significant investments in new newsroom tech and talent. Ten new staffers will join our newsroom in the next few weeks. All are outstanding journalists with strong digital skill sets and proven ability to connect with audiences. These hires are essential to our future. And we will continue, in the months ahead, to supplement the newsroom’s existing strengths with hires who will help us grow our audience, break more stories, right more wrongs, and delight and challenge our readers even more than we do today.

But there are also hard choices that must be made as we grapple with the economic realities and the changing nature of our industry. We have an editing and print production structure that can no longer effectively serve our changing needs. And we have some reporters, columnists and editors who have not adapted to the demands of digital publishing.

And so today we’re announcing a new Voluntary Separation Program (“VSP”). This VSP is open to all full-time newsroom employees who are members of the Guild. Each employee who applies and is accepted for the VSP shall be entitled to the following:

  • Four (4) weeks pay for each year of service since October 9, 2010.  For staffers who’ve been employed with PMN from on or before that date, that equates to 28 weeks of pay. 
  • An additional lump sum payment based on years worked for the Company (from the actual date of hire) as follows: $2,500 for employees with less than ten (10) years of employment; $5,000 for employees with ten (10) years to less than twenty (20) years of employment; $10,000 for employees with twenty (20) years to less than thirty (30) years of employment; and $15,000 for employees with thirty (30) or more years of employment.
  • Four (4) weeks of medical benefits per year of service since October 9, 2010, at the employee’s existing level (tier) of coverage, up to six (6) months at no cost to the employee. That coverage will be provided via COBRA or, for age-eligible participants, Medicare.
  • Outplacement support for six (6) months via CareerArc at no cost to employee.

Applications for the VSP will be accepted through October 27, 2017 and employees will be notified as to whether or not they have been accepted no later than October 31, 2017. Final decisions as to who will be accepted will be at the Company’s sole discretion, based on a determination of the Company’s business needs. Human Resources will be sending a VSP Information Package with all program details later today.

The terms of this program are generous, as befits long-time employees who have served readers and our newsroom well. But these terms will not be matched in the future. This program is the last best chance for staffers considering a life change, retirement or different career. 

It’s our hope that this voluntary offer yields 30-35 participants. Unfortunately, if there are too few applicants to reach that figure, there will be layoffs. Employees who are laid off will not receive the additional lump sum payment that is included in the VSP. Laid off employees will only receive the severance to which they are entitled under the Guild contract.

If layoffs prove necessary, reductions in force will be determined using the full range of criteria included in the new collective bargaining agreement. Those criteria are skills, performance, length of service and qualifications. All Guild job categories will be considered for reduction in force, including reporter, columnist and coverage editor. Some categories, including multiplatform and photo production editor/print, will be dissolved in this process.

Today we will post eight additional positions on the Print Coordinator Desk, with the intention of filling those roles with the eight best-qualified applicants from the Guild categories that will be eliminated. We will not be able to find positions for all of the journalists whose job categories are being eliminated. 

Decisions on the new print coordinator hires will be made by Oct. 19.

Three unyielding realities are forcing these decisions.

  1. The pressing need to invest in new platforms and new audiences. The restructuring this spring revealed critical roles that could not be effectively met with in-house personnel. Those roles are essential, and must be filled.
  2. Print and digital advertising revenue continues to decline. The early performance of the meter and revenue growth in events and native advertising point to a sustainable business model for our journalism, but those initiatives are in their early days, and the new revenue is not yet sufficient to cover advertising declines.
  3. Our news report must be credible, accurate, smart, and timely — but not just in print. Today, our work appears on an ever-multiplying array of platforms, from Philly.com, to our app, in syndication, within newsletters and on wide array of social platforms. This requires a different editing structure than we have today.

At our request, a revamped editing structure is being designed by a committee of front-line newsroom leaders. More details on the new structure will be available soon.

We do not take these decisions lightly. The collective experience, contributions and journalistic firepower of the employees we will part ways with this fall is enormous. 

But we already know what happens when we cut without investing in the future. We’ve done that before, many times, and we know where that leads. We will not take that path again.

Sincerely,

Stan, Gabe and Patrick

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