Driven by a 40 percent reduction in advertising since 2006, The San Diego Union-Tribune today announced a sweeping cost-reduction plan that will temporarily reduce its top executives’ pay, eliminate 401(k) matches, suspend merit-based raises and include unspecified staffing cuts.

The moves will affect everyone across the company and create a looming specter of layoffs. When the newspaper offered its employees voluntary buyouts in September, the paper said it was their last chance at a buyout before the paper was sold. A memo today from CEO Gene Bell promised that cuts are not stopping and will include staffing reductions. He wrote:

We must make even more dramatic changes in our cost structure that, unfortunately, must soon include a reduction in force. We are working through the details of staff reductions thoughtfully with a focus on protecting the quality of the products our readers and advertising customers expect. Other deep cuts in our costs will begin to take effect immediately.

Top executives’ salaries will be reduced 18.5 percent in February and March. Other supervisors’ salaries will be cut at least 9.25 percent those months.

Depending on their seniority, reporters and other full-time employees will be required to take one or two unpaid days off in February and March. Health insurance for part-time employees is being eliminated. Other employees will be required to pay an increased share of health insurance costs.

The newspaper that David Copley owns has been for sale since July. Bell told employees that the paper continues working with prospective buyers, but the sale environment has been “challenging.” Bell offered this ominous news:

We must accept this fact: Regardless of who owns it, ours will be a smaller business in the future than it has been in the past.


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