The geese that lay the golden eggs of digital content are going on a diet. The likelihood of cuts extending into the newsroom is something that Outsell has been commenting on publicly in recent weeks. Newsroom staff tightening coupled with declining print circulation is nothing new. Both have been part of the landscape for a decade as an industry squeezed by changing media habits and Web competitors has retrenched its print-side operations. But something bigger is happening now. Earlier this year, Wall Street began to signal its developing concern that newspaper companies just aren’t meeting the challenge, further depressing share prices and lowering debt ratings.
Outsell Affiliate Analyst Ken Doctor notes that this week’s cutbacks and layoffs – and how Wall Street greeted them – are of a different magnitude, however. At the New York Times, fully 4 percent of staff will be cut through the middle of next year. Early estimates have the number at 45 positions in the Times newsroom. And cuts are expected at the Times-owned Boston Globe as well. In Philadelphia, it’s more bleeding for a paper that’s suffered numerous cuts over the last several years. The Inquirer, once the crown jewel of Knight Ridder’s Pulitzer-earning papers, will cut about 15 percent of its newsroom staff – about 50 people overall. And the Daily News, long the popular people’s paper of the city with an attitude, will cut 19 percent of newsroom staff, or 25 positions, leaving it at about half its strength of less than two decades ago.
The papers and their readers will all lose much experience, as buyouts precede layoffs. With such dramatic staff reductions, the papers are bound to lose production – news holes are also shrinking. That means less content in the papers and online, and for syndication and distribution.
Content that is never produced can’t even yearn to be free.
Wall Street, which had reacted poorly to Knight Ridder's lower estimates last week, didn’t cheer the news. Though cutbacks often signal executive discipline to the Street, these cutbacks brought out the smell of fear. NYT lost more than 7 percent on the news, and KR and its sister companies, Gannett, Tribune, and McClatchy, all suffered 2-percent-plus daily declines.