Sacramento Bee management warns: "mass layoffs" a possiblity beginning in March

The union representing 268 of the Sacramento Bee's 1,126 full- and part-time staffers was told by Bee that if the Guild rejects an upcoming cost-cutting proposal from the Bee, drastic measures including "mass layoffs" beginning in March are a serious possibility. Here is the union's account of what transpired at the meeting.

Sacramento Bee employees should expect a serious wave of layoffs in early March, as well as other cost-cutting measures now being considered, including wage cuts and mandatory furloughs as McClatchy Newspapers’ financial crisis worsens, company representatives told the Guild’s bargaining committee in a 90-minute session Wednesday.

The company said all options are being considered, but that layoffs would occur in quantities to trigger a federal WARN Act notification by The Sacramento Bee – required when a company does mass layoffs.

(More information on WARN: www.doleta.gov/programs/factsht/warn.htm)

“We need to reduce very quickly,” said The Bee’s Human Resources Director, Linda Brooks. “I don’t want to lead anyone astray. That number is going to be big.”

She provided no specific numbers, no financial target, no dollar figure. Brooks said in an on-the-record bargaining session that the company is still working on all manner of ways to cut costs, from fewer pages to fewer employees.

Mandatory furloughs are being considered possibly for the second quarter of 2009. And wage cuts being considered run from the publisher on down, the company said.

“The newspaper industry is in a depression and this company is part of it,” said company attorney Bob Ford. He said all of McClatchy’s newspapers are making similar plans to cut costs as the firm’s revenue picture deteriorates faster than projected even weeks ago. He said the layoffs would be on a scale exceeding anything before seen at the Sacramento operation.

The company said nothing is likely to happen before Friday, Feb. 27. The company and the Guild, which represents 268 of The Bee’s 1,126 full- and part-time staffers, have scheduled a session at which The Bee will formally propose cost-cutting measures. Our bargaining committee was told in no uncertain terms that our rejection of any or all of those measures – such as potential wage cuts or furloughs – would lead only to more layoffs.

Company representatives said layoffs under the WARN Act provisions will come with the following provisions:

- 60 days of continued employment following the layoff notification. Medical coverage continues.

- Accumulation of severance pay, two weeks per year of service to a maximum of 40 weeks.

- Accrued vacation continues during the 60-day period. Medical benefits would continue for three additional months after layoff under COBRA, and possibly longer, said Brooks.

- The company will also bring in EAP counselors and financial advisers to help laid-off staffers plan a strategy. It will also offer people use of company computers to apply to the Employment Development Department. Others will be brought in to help people through the process of applying for state jobs.

Brooks said criteria to determine layoffs consists of three things, and that preliminary planning has already been done. Criteria include skills, performance and tenure. In the case of a tie breaker, tenure wins.

Prized newsroom skills, said Brooks, include expertise in investigative reporting, databases, mapping tools and freedom of information requests.

McClatchy Newspapers had previously announced that it intends to trim $100 million to $110 million in costs soon. Former VP for News, Howard Weaver, said just weeks ago that all the chain’s newspapers are making money. But the company is carrying approximately $2 billion in debt from its 2006 acquisition of the Knight Ridder chain and earnings are falling.

Bee Guild President Ed Fletcher was told that the company will consider offering voluntary buyouts if it gets names very soon of volunteers. Bob Ford offered no guarantees on that front, but acknowledged that it could be helpful in reducing the numbers of layoffs.

“We don’t need a feel for it,” he said. “We need names.”

Brooks said that people who ask for buyouts will not be targeted for layoffs, having indicated their interest.

Fletcher, and bargaining committee members Cindy Taylor of advertising, and Walt Yost and Jim Wasserman of editorial, asked numerous questions to pin down more details. Guild representatives Linda Frediani and Wendy Mejia also participated. We were told that each 1 percent wage cut among bargaining unit members would save approximately $140,000 to $160,000 – approximately three jobs. The paper is also exploring ways to use fewer print pages – each fewer page printed daily saving about $52,000 a year. We asked about voluntary furloughs and expressed the willingness of our members to take them. Those are in the mix, we were told. It takes approximately 52 people taking one week off per year to save one job.

In short, this session was grim. It has come to this after a long, gradually-building slump in the housing sector and larger economy.

This session was scheduled to discuss the continuing question of a pension freeze. That fell to the sidelines. We were once again told very bluntly that the company believes it has the legal power to freeze pensions and that any expenses it has to pay if the Guild challenges it on the question will result in more layoffs. That freeze is scheduled to take effect March 31, but remains on the bargaining table.

To summarize, it appears, unfortunately, that a business many of us love, a newspaper that many of us have spent years climbing toward, is caught up very badly in America's economic crisis. We are being told to prepare for an extraordinary and painful journey in coming weeks. The company has promised to send us details as they have them. We promise to do the same.

UPDATE: It's legit -- the memo was cross-posted at the Guild's web site.
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