According to Robert Channick at the Chicago Tribune, (and it’s hard to imagine a better source given the news item in question) the Tribune Company (OTCMKTS:TRBAA) announced today that in an effort to concentrate on its digital offerings, they will cut 700 jobs amongst its properties. The losses will affect the Chicago Tribune, Los Angeles Times, and six other daily papers owned by the Tribune Company (OTCMKTS:TRBAA).
The plan, according to an internal memo, is not only a cutting of its workforce but a major restructuring of its advertising, marketing, manufacturing, and digital media departments to bring them under a more streamlined, and common, leadership.
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Tribune’s CEO Peter Liguori weighs in
“Unfortunately, organizing around functional lines rather than maintain what we’re doing locally, there is going to be some staff reductions,” said Peter Liguori, president and CEO of Tribune Company (OTCMKTS:TRBAA), the Chicago-based media company. “We are not going to be reducing any of our frontline reporters. Over time there will be some small reductions on the editorial side, but we want to maintain our best-in-class local journalism.”
The aforementioned restructuring will go into effect immediately in 2014. Digital growth is the future of Tribune Company (OTCMKTS:TRBAA) and its digital publishing division will be run by Bill Adee. Adee presently holds the tile of senior vice president of digital development and operations at the Chicago Tribune.
“Along with this organizational change, there is going to be a further strategic change in direction, which is digital,” Liguori said. “We’re going to have to redeploy some of our capital, not only to meet our readers’ current needs, but we’re going to have to anticipate the future needs and products of newspaper readership down the road.”
“The new operational plan is going to change the company into one company with eight locations, as opposed to how we operate now which is eight individual and separate businesses,” Liguori said.
Despite cut, publishing division generating profit
The Chicago-based Tribune Co. emerged from a four-year stay in Chapter 11 bankruptcy on December 31. The company owns 23 television stations including WGN-Ch. 9; national cable channel WGN America; WGN-AM 720; eight daily newspapers and other media assets.
The cuts are not terribly surprising as the company is dealing with a loss of $75 million to $100 million in publishing revenue from last year when the company cut 800 positions.
What is somewhat surprising is that the publishing division continues to operate at a profit, something numerous newspapers nationwide certainly can’t claim. For the first three quarters of the year the publishing division of Tribune Company (OTCMKTS:TRBAA) generated a profit of over $150 million.
“This change in organization and operation clearly addresses it (mounting losses in ad revenue), gets ahead of it and gives us the best possibility to create runway to create our new future,” Liguori also said in the memo.