From: Company Communications
Sent: Mon 12/20/2004 1:01 PM
To: All Seattle Times
Subject: Message from Carolyn Kelly
Seattle Times Employees:
In my update last month I shared with you that, as we reach the end of 2004, we are concluding our fifth straight year of losing money at The Seattle Times. Losses this year will be a record, exceeding $12 million.
In the past six months, it's become evident to us and the entire newspaper industry that the changes in the economy and our industry's revenue model are permanent. These structural changes caused our revenue to fall $50 million in one year four years ago and never recover.
Newspapers across the country have begun a new wave of downsizing and restructuring. While we have especially difficult local conditions, our actions mirror what the industry is doing to adapt to a changed time. Resizing to meet the financial reality is needed if we are to survive. Frank has signed off on the Leadership Council's immediate downsizing recommendations. Leadership Council members will continue to refine their recommendation and study potential areas of savings.
With many of the cost-saving measures that have been identified, however, there is no reason to wait. We clearly need to do them, and move forward as soon as possible. Several items were already flagged in the regular 2005 budgeting process and a few have already been put in motion. We have now confirmed additional reductions as essential at this time. A list is below.
I wish I could say making these painful cuts will get us to where we need to be. It won't. There are more cuts to come. Sadly, they will inevitably involve staff reductions. I know it creates a great deal of anxiety to say this and not offer more information. But we don't know how many people and we don't know who. We haven't made final decisions on what further operational cuts will be made and what positions they will affect. We plan to notify anyone who might be impacted as soon as we are able, with a target of early February for all notification to be completed. And, in the case of our affiliated staff, we will work with unions at The Times in accordance with contracts. When we can, we will keep you all updated on what further changes are being made.
As we go through the very difficult process of significantly restructuring and downsizing, I encourage you not to jump to conclusions or be susceptible to rumors. No one group, department or level is being targeted or is exempt from consideration. We are making tough but very strategic decisions as we pare down to what is essential to our core business. If you have questions, please talk to your manager or Leadership Council member.
You can help. Think about what changes in your work area would result in savings or additional revenue and talk with your department head. We need everyone's support in thinking creatively.
Our immediate objective is survival. We must get the company's expenses in balance with revenues if we are going to preserve The Seattle Times as an independent newspaper. I'm confident that if we react and adapt as needed now, we not only will survive but will enable a solid future for The Seattle Times and our mission of quality journalism, independent ownership and service to our community.
I know this is a difficult time to hear this message, but there's no good time. We promised to update you quickly when we had further information and so we felt it important to communicate our decisions and thinking now.
Thank you for your patience, understanding and hard work. Your Leadership Council member will share more information as plans become finalized.
COMMITTED DECISIONS AT THIS POINT
This is a list of significant reductions that have been confirmed. In addition to these changes, every department has made major reductions and continues to contribute to the effort.
Eliminate selected Advertising promotion initiatives
Complete home delivery combo route resizing
Subcontract incoming call center
Reduce external media buy
Reduce market research projects
Reduce United Way and other corporate giving
Go to pre-paid only for transient and non-contract advertisers
Reduce in-paper employment ads
Do not provide individualized Total Comp Statements
Reduce front desk staffing
Do not spec replacement of Advertising legacy systems
Do not purchase Advertising preprint estimating and mapping tool
Reduce expense through improved wireless/long distance plans
Keep current wireless equipment longer
18% reduction in Times additional daily news space bank(includes space reductions in Sports, Ticket, NW Weekend and Wine, and eliminating movie listings three days per week)
Sunday space reduction of 130 pages per year
Reduce use of special sections to core content or revenue related only
Reduce travel, syndicated material, color use
Additional space cuts (tbd) in both daily and Sunday
Reduce the number of pages in the TV book
Eliminate kraft wrap for Thursday
No spare parts for double truck imager
Reduce Security staffing, janitorial and FV park maintenance
Reduce FV equipment repairs
Go to digital Pacific Magazine images
Adv, News, Ops
Reduce in-paper promotional ads (newsprint & ink costs)
Suspend company match to 401 (k) plan for unaffiliated
Reduce discretionary spending (meals, travel, conferences, etc)
Freeze selected open positions