J/S "RESTRUCTURING" TO COST 130 JOBS

Are You Ready for "Managed Attrition"?

Journal Communications, Inc. [JRN], the publisher of Milwaukee's only remaining daily newspaper, announced a "restructuring" today, Wednesday, July 2nd, 2008, that will involve the elimination of 10 per cent of its workforce, or 130 employees. All employees, with no "years of service" requirement are eligible to apply for the package, which includes a cash payout and health insurance benefits. Employees have been notified that there is a three week window for them to ask questions and study the proposal. About 25 cuts are expected in the newsroom. This is particularly tough, since there are scant opportunities for journalists in this city, and I can't think of any that come with a regular paycheck.
Publisher Elizabeth "Betsy" Brenner said in a press release that the move was made to "address the impact of a challenging advertising environment," and added that the goal would be accomplished by voluntary and involuntary separations, as well as "managed attrition."
"No one could have foreseen the downturn in our local economy that has only deepened" since the first round of buyouts was announced last October, Brenner wrote. (How could they, with no business reporters around to pay attention?)
In a letter to staff announcing the move, Brenner said traditional advertisers like "car dealers, real estate agents, hiring officials, retailers and mortgage banks" have been "battered by a 'perfect storm' of deteriorating credit, slowing home sales, contracting company size and higher gas prices."
As a result of these and other factors, Journal Sentinel revenues are down 12 per cent in the past year. On a happy note, that is only a fraction of the decrease in the price of company shares.
Journal Communications stock has lost two-thirds of its value in the past year, and trades at $4.60 per share. It pays a whopping (and unsustainable) dividend of over 6 per cent.
The company, never profligate with its funds, has introduced cost-cutting measures that border on the surreal. For example, it is severely limiting the number of copies of the print newspaper that are available to the newsroom, where the paper is written. Reporters are now provided pdf versions of the "paper" on the company intranet. However, as a practical matter, many reporters often use printed notes when composing their stories. When the Journal Sentinel pages are printed out in standard 8-1/2" by 11" paper, they are not legible. So, the copies must be enlarged, and six sheets of copy paper are required to do the job of one page of newsprint.
The Journal Sentinel will be rolling out a new internet site around September or October. This interface will more closely resemble the look of the existing print newspaper, and may signal its demise.

-- Michael Horne