Chronicle to cut 220 jobs, 8.5 percent of its work force

By Michael Liedeke The Associated Press
Wednesday November 28, 2001

SAN FRANCISCO — The San Francisco Chronicle announced plans Tuesday to cut 220 jobs, adding Northern California’s largest newspaper to the list of media companies jettisoning workers to offset steep advertising losses. 

The cuts, representing 8.5 percent of the Chronicle’s 2,600 employees, will involve a combination of layoffs and voluntary buyouts. 

Management told labor leaders the newspaper will fire 114 workers and entice slightly more than 100 other employees to voluntarily leave by offering up to two years pay and up to one year of medical benefits, said Carl Hall, a longtime Chronicle staff writer and president of the Northern California Media Workers Guild. 

“The need to reduce our work force was one we hoped to avoid,” Chronicle Publisher John Oppedahl said in an internal memo to employees. “However the long-term health of our company requires us to go beyond the cost-saving efforts we have taken so far this year.” 

Besides the staff cuts, the Chronicle is suspending management bonuses next year, Oppedahl said. 

The layoffs will be limited to Chronicle employees hired after July 27, 2000 — the date the Hearst Corp. bought the paper for $660 million. In November of last year, Hearst relinquished control of the Chronicle’s rival, the San Francisco Examiner, to a local publisher and merged the staffs, promising not to lay off any worker hired before the purchase. 

“They are going right up to the edge, but I can’t accuse management of abrogating on that guarantee,” Hall said. 

The buyout packages won’t be offered to all workers. The ineligible departments include the writers and editors in the Chronicle’s business section, which covered the Silicon Valley boom and bust that resulted in Tuesday’s decision to cut jobs. 

In his memo, Oppedahl cited the steep slump in the high-tech industry as a primary reason for the cutbacks. With funding for free-spending dot-com companies gone, the Chronicle’s ad revenue has plunged by 20 percent this year, Oppedahl said. The ads in the help-wanted section are down by more than 50 percent, reflecting the mass layoffs that have hit the Silicon Valley and tourism-driven industries. 

Less-severe advertising downturns prompted a large number of newspapers, magazines and broadcasters across the country to trim their staffs months ago. The Chronicle had been a notable holdout, even though the San Francisco Bay Area market has suffered some of the most dramatic losses. 


“Things are bad pretty much everywhere, but it’s worse in San Francisco,” said John Morton, a newspaper analyst. 

Two of the Chronicle’s biggest rivals, the San Jose Mercury News and the Contra Costa Times in Walnut Creek, offered voluntary buyouts to pare their staffs by nearly 10 percent earlier this year. Those cuts were mandated by Knight Ridder, a publicly held newspaper group that faced pressure from Wall Street to boost profits. 

As a privately held company, Hearst had more leeway to accept lower earnings this year to avoid staff cuts, Morton said. 

But the Chronicle purchase saddled Hearst with additional costs in the Bay Area. To complete the takeover, Hearst agreed to pay the Examiner’s new owners, the Fang family, $66 million during a three-year period ending in November 2003. 

Based on trends since the Sept. 11 terrorist attacks, Chronicle management concluded “current economic conditions will continue to deteriorate,” Oppedahl said in his memo. 

The Chronicle began handing out pink slips Tuesday. The layoffs will affect 85 workers represented by unions and 29 management employees, according to Hall, who was among the labor leaders briefed by Chronicle management. 

The newspaper’s executives did not provide details about who specifically will be laid off, but Hall said at least one reporter, one photographer and several copy editors are on the list. 

Even as it struggled financially this year, the Chronicle boosted its readership, largely by introducing an afternoon edition after Hearst abandoned the Examiner. The Chronicle reported average weekday circulation of 512,042 for the six months ending Sept. 30, a 12 percent increase from the previous year. 

Although the “increase in circulation is an important component to the long-term success” of the paper, it wasn’t enough to offset the advertising losses, Oppedahl said. 


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