Pain & Promises at McClatchy

This is a time of considerable pain at McClatchy, most especially for the 1,400 people who are being told their jobs are gone. That amounts to about 10% of the full-time equivalent workforce at our company. Amongst editorial employees, the total is about nine percent, probably ending up between 310-320 people.

Almost all are people we wish we could keep. The numbers include colleagues with impressive resumes and long tenure who have contributed great things. In places where last-in, first-out rules apply, too many are talented minorities we have worked hard to recruit and retain. At a time of stress and challenge in adapting to new demands, online and elsewhere, moving backward on staffing is doubly painful.

We’ve never done anything like this before. While other news companies went through round after round of broad, across-the-board layoffs, we relied principally on managed attrition to help cut expenses while revenues fell. (Some people also were let go when jobs were outsourced, though never in the newsrooms.) This is a cultural as well as individual trauma for us.

The combined impact of increased media competition and a deepening national recession has forced us to cut more quickly. We hope this aggressive move will spare us another like it down the road, though there are no absolute certainties in today’s volatile environment. We need the the 90% of employees who aren’t in the downsizing to focus on the work at hand with confidence, not be looking over their shoulders for another round of layoffs. I hope we can achieve that.

I expect some employees at the “old McClatchy” papers will see this as confirmation that the company changed irrevocably when it bought Knight Ridder. For folks at the former KR papers, I suppose this must be evidence that not as much changed as they hoped.

Both are wrong, in my view. The economic squeeze we’re in right now has nothing to do with greed or corporate culture, or even business mistakes. It has everything to do with a radically changing business environment and with revenues, which, for us, have fallen by hundreds of millions of dollars. Airlines are canceling flights, laying off crews and charging for checked luggage. More than 65,000 jobs have been lost on Wall Street. Auto workers and real estate agents are working at Starbucks.

I wrote here just a week ago about why I think it’s foolish to predict the death of newspaper companies like ours on the basis of simpleminded dichotomies. Yes, there are powerful forces at play that have changed the old rules of the game forever. Yes, there are cyclical economic forces that have deeply compounded our pain.

But while we are not immune from those forces, neither are we stupid. We’ve recognized for some time that irrevocable changes were afoot, that business-as-usual was no strategy for the future. Because we didn’t simply renounce the print franchise (which, as I keep mentioning, is a $40+ billion-a-year industry that reaches half the adults in America every day), some critics attach the label "dinosaur" and predict imminent demise. What they have failed (or refused) to note is the rapid transformation we’re already undergone, and the latent potential for more change in our future.

Integrated multimedia news and information companies employing sophisticated newsrooms and big sales departments (that’s us) can assemble big, growing audiences. And while Google’s AdSense and related technologies have changed the advertising/revenue paradigm, growing audience remains the best predictor of future success for any media company.

We have to tailor this 151-year old company differently to operate profitably and respond efficiently in the new arena. With an advertising recession layered on top of the other changes, we found we had to move faster than we wanted, and that required the layoffs we announced today. Some things you simply cannot control.

But some things you can, and our response to this period of challenge is one of those. I can assure you that thousands of McClatchy employees, like me, will take some time to grieve the loss of colleagues being laid off and to curse the conditions that led to it, and then go back to work producing quality public service journalism.

We will be around doing that at McClatchy for a very long time to come. If any of you doomsayers would like to put some money where your mouth is on that prediction, you know where to find me.