Tribune Co. to Cut Jobs at LA Times, Chicago Tribune

Company Is on Verge of Going Private Under Zell

By Published on .

NEW YORK ( -- The two most prominent Tribune Co. papers, the Los Angeles Times and the Chicago Tribune, said today that they are planning significant job cuts.
Scott Smith
Scott Smith

'Ongoing changes'
In Los Angeles, Times Publisher David Hiller told employees today that the paper will eliminate 100 to 150 jobs to reflect "fundamental and ongoing changes" occurring in the business. In a separate memo to staff, Editor James E. O'Shea said he had worked extremely hard to minimize any staff reduction.

Both men joined the Times after their predecessors, Publisher Jeffrey Johnson and Editor Dean Baquet, resigned under pressure after publicly resisting Tribune Co.'s pushes for staff cuts.

Mr. Hiller justified the new job eliminations in his memo by pointing to the paper's recent bad numbers. "You read last week that the company announced our first-quarter results, and they were not good," he wrote. "For our whole Los Angeles Times Media Group, revenue was down 4% and cash flow down 13%. There was some good news, with online revenue growing 20%. But the growth in new media is not yet big enough to offset the decline on the print side of the business."

Trims back other areas
The Times has also eliminated its Sunday TV section, outsourced circulation call centers and sought savings in areas like travel and postage expense. reported last week that cuts were coming.

In Chicago, Publisher Scott Smith said the Tribune needs to reduce staff by up to 100 employees across all departments. "We do expect revenue trends to improve as the year progresses, but full-year revenue will likely be below last year," Mr. Smith said in a memo. "Therefore we need to achieve additional expense savings at the same time we focus on revenue growth. We will reduce our planned expenses through a combination of lower newsprint prices, streamlining several aspects of our product mix and processes, and limited staff reductions."

An $8.2 billion buyout
Chicago billionaire Sam Zell recently won a bidding war for Tribune Co., with an offer of $8.2 billion, or $34 per share, in a highly leveraged deal that will take the company private.

The Times' Mr. O'Shea acknowledged in his memo that many employees had asked how cuts could be justified when executives will receive huge bonuses and stock grants once a change of ownership is complete. "I cannot -- and will not -- defend any such bonuses," he said. "Frankly, I understand why you are angry about these plans. But this staff reduction is not because of -- or about -- bonuses. Unfortunately, the business model at newspapers across the nation remains under challenge and we are no exception."
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