U-T Offering Voluntary Buyouts

Thursday, Nov. 2, 2006 | The San Diego Union-Tribune is offering early retirement packages to 67 employees who have at least 30 years of experience in an attempt to cut payroll costs without laying off employees.

The company told employees Wednesday they have 45 days to decide whether to accept the voluntary early retirement offer – commonly known as a buyout – which would give employees a year-and-a-half’s salary, a full year of health benefits and partial health coverage beyond that initial period. Employees who accept the offer have a seven-day grace period to change their minds.

The buyout-eligible employees, who come from departments throughout the newspaper, received the news at an 11 a.m. meeting, said one veteran reporter who attended. There, two representatives from the company’s human resources department delivered the buyout news to about 45 people, the newsroom vet said, speaking on condition of anonymity.

The two representatives “implied that everything’s on the table still,” the veteran said, including layoffs or further buyouts. The paper will also cut its freelancing budget.

“I think the paper is in serious shape,” said the newsroom veteran, who’s eligible for the buyout. “This isn’t surprising. We’d been talking about this for a long time. [But] we were expecting it in January or February.”

The paper did not announce any targeted number of employees it hopes to buy out. The offer was extended to all veteran employees, except for sales staff and union employees. (The paper’s newsroom no longer has newspaper union employees.)

The buyout offer came a day after Copley Press Inc., the newspaper’s parent company, announced plans to sell seven Midwestern newspapers in an attempt to insulate the Union-Tribune from the financial impacts of nationwide declines in newspaper circulation and the burden of estate taxes from company matriarch Helen Copley’s 2004 death. A Copley Press spokesman did not return a call for comment.

“Many other publishers have found it necessary to reduce expenses, and the Union-Tribune has already undertaken a number of steps to control costs,” Chief Executive Officer Gene Bell wrote in an internal memo. “The time, unfortunately, has come for us to take more direct action to reduce our payroll.”

Copley Press has been downsizing its newspaper holdings throughout the year. In June, it began exploring the sales of its three Los Angeles-area newspapers. A sale is believed to be near, according to the Los Angeles Times.

In September, Copley Press, a La Jolla-based private company run by Helen Copley’s son, David, announced the consolidation of Today’s Local News with the Union-Tribune‘s operations. Twenty-six employees were laid off at the San Marcos-based community newspaper.

If the Ohio and Illinois papers are sold, it would leave Copley Press with the Union-Tribune as its sole paper, which has raised questions about the possible closure of Copley’s corporate offices in La Jolla.

With the voluntary buyout decision, the Union-Tribune joins a long list of major newspapers across the country to use the tactic to reduce staff size. The Washington Post bought out 70 staffers during the summer. The Dallas Morning News bought out 110 in September. The Cleveland Plain Dealer bought out 65 newsroom employees last month.

The papers have been confronting an industry-wide trend of declining readership and sagging advertising revenue. Nationwide, daily newspaper readership dropped 2.8 percent during a six-month period ending in September. Sunday readership declined 3.4 percent in the same time. At the same time, newspapers have seen an increase in web readership.

The Union-Tribune has seen similar drops in newspaper readership in the last year, despite winning a 2006 Pulitzer Prize. The paper’s Sunday circulation dropped 12 percent in the last year, losing 52,000 Sunday subscribers. Its daily circulation dropped 10.5 percent, losing about 36,000 subscribers.

It is not known how effective or attractive the buyout offer will be for the paper’s most veteran staffers. At least one veteran will take the buyout; another veteran reporter is undecided.

A reporter who isn’t eligible for the buyout said the strategy could be a “good thing,” allowing the paper to shore up its strengths. But reporters said they were unsure how many colleagues would accept the offer. At least 12 to 15 newsroom employees are eligible.

“I wouldn’t be surprised if people are freaking out,” said the reporter who isn’t eligible. “But smell the coffee. Look at what’s going on in the industry. … This is a business like any other. I’m just doing my job and trying not to freak out about it.”

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