You knew there would be a reckoning at The Seattle Times after five years of losses. Early this month, the state's biggest newspaper announced it was $12 million in the hole in 2004, and two weeks ago, the paper said it would lay off as many as 110 of its 1,500 employees in February. "We have to restructure," says Times spokesperson Kerry Coughlin. Besides what it calls an unfavorable joint operating agreement with the smaller Seattle Post-Intelligencer, the most recent Times red ink, Coughlin says, is a result of a changed marketplace, including a precipitous drop in classified advertising revenue.
But whatever workforce reduction the Times wants to make will be complicated by a labor contract with employees represented by the Pacific Northwest Newspaper Guild, the union that struck the Times and P-I in 2000. As with most union agreements, layoffs would be based on seniority—last hired, first fired. And under the contract that ended the strike in early 2001, the paper would likely be forced to lay off several high-profile reporters who were hired in the past year, recruited from papers like the Chicago Tribune. Last week, the company said it was willing to offer severance pay to guild workers who voluntarily left the paper, in exchange for changes to job classifications that would somewhat affect the hierarchy of seniority.
Coughlin says the move is an attempt to maintain journalistic quality while the paper struggles to adapt to new marketplace realities, such as the drop in classified revenue. Besides a generally poor economy, big newspapers everywhere are struggling with the emergence of classified advertising competitors on the Internet like Monster.com. Coughlin declined to specify the amount of losses in the years before 2004, but the locally controlled Times has said the 2000–01 strike was a major blow and that the joint operating agreement (JOA) with Hearst Corp., the P-I's owner, has been onerous. Hearst is a multibillion-dollar company, and the P-I has said it has no plans for layoffs.
The Times is part of the privately held Seattle Times Co., a small Washington and Maine newspaper chain controlled by publisher Frank Blethen and other Blethen family members. (The Knight-Ridder chain has 49.5 percent stake.) The Times, with a weekday circulation of about 231,000, handles advertising, production, and distribution for the 156,000-circulation P-I and gives Hearst 40 percent of revenue from both papers after business expenses. (A mostly Times-produced Sunday edition has a circulation of 473,000.) Since 2003, the Times Co. has been engaged in a legal struggle, initiated by Hearst, over the Times' desire to end or amend the JOA. Blethen has said the Times can't operate profitably under the arrangement, and he thinks Hearst is trying to bleed his family's paper with legal expenses so it's forced to sell—to Hearst.
The collision of circumstances— the economy, the marketplace, the JOA litigation—makes the Seattle Times predicament hard to sort out, but whatever the source of ills, the paper will be laying off some 110 people. "It's a tough, painful thing to go through," says Steve Miletich, a Times reporter who is vice president of the local Newspaper Guild. The paper says it plans to cut 55 guild positions, with the other half of layoffs among workers represented by two Teamsters locals and nonunion personnel. Twenty-three of the guild positions are in the paper's news and editorial department, and 12 of those are reporters, mostly in the paper's Snohomish County and Eastside suburban bureaus and in a three-year resident program. Six editors are slated to be cut as well. Among other union employees, the paper plans to lay off 25 in circulation and five in advertising.
The severance package would give guild-represented employees who choose to leave up to a year's worth of pay, depending on length of tenure. The Times would also cover some health care insurance costs.
In return, the Times has asked the guild to allow it to shift some reporters in the business and sports departments into new job classifications, which would give the paper some flexibility in deciding whom to let go. That request reminds some of when the paper reclassified several copy editors after the 2000–01 strike—including one in particular who had a fractious relationship with management—and then promptly laid them off. "They are liars," Ivan Weiss, that legendary former copy editor who later settled with the paper, says of Times management. "There's no reason for the guild to give this to them."
Miletich says there are longtime staff members who are interested in the severance package, but whether the union will accept the offer is unclear. Miletich won't say, and Elizabethe Brown, the union's administrative officer, did not return calls for comment. The matter is to be put before the union's membership in the next couple of weeks. If the guild accepts the offer, the paper will begin accepting voluntary resignations in mid-February. If it fails to get 55 guild employees to take severance, the paper will begin laying off employees based on seniority.
The company will also institute other cost-saving measures. Its daily news space will be decreased, most likely in the business and sports sections, and the company will farm out a customer service call center to a company in Wisconsin. This week, the Times announced it will eliminate stock and mutual fund listings in the Sunday edition (it will continue to run the week's closing prices on Saturday) and switch the weekly TV listings insert to a format less expensive to produce.