The Los Angeles Times has an owner with deep pockets, but unfortunately that hasn’t made the newspaper immune to the financial realities of the coronavirus.
The newspaper on Tuesday decided to furlough a number of employees not in editorial, and also not represented by the union, WWD can first report. But some editorial employees and managers will be hit with pay cuts and all staff will no longer receive a match to 401(k) savings accounts.
The furloughed employees are said to be mainly on the business side of the operation, like sales. A representative of the paper would not comment on specifics, but it’s thought that the furloughs hit at least two dozen employees. The furloughs are to last up to 16 weeks, unpaid but with health benefits intact, and start Friday, according to an internal memo.
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In addition to the unpaid furloughs, some senior editorial staff across the paper will be working with reduced pay, on a scale of between 5 percent and 15 percent, depending on salary. The pay cuts are set to last 12 weeks. The stop of 401(k) matching will go through the end of the year.
In the memo to staff, Chris Argentieri, president and chief operations officer of a newspaper group including the L.A. Times bought in 2018 by medical industry billionaire Patrick Soon-Shiong, said, “It’s difficult to capture in words the challenges we are all facing, both personally and professionally.”
He also alluded to the possibility of cuts for editorial staff represented by the union, saying leadership will “meet with union representatives to determine any expense-saving initiatives that may be implemented.”
In a statement on Twitter, the L.A. Times Guild wrote that union representatives will meet with management “soon to learn more and urge full support for our news operations during this global emergency.”
Like likelihood of newsroom employees making it unscathed by cost-cutting may be very slim, however.
“Public health guidelines related to the coronavirus have led to both unforeseen reduced revenue and unplanned expenses for our company,” Argentieri noted in his memo. “The decline in revenue from every area of our business is unprecedented. Due to the unexpected effects of COVID-19, our advertising revenue has nearly been eliminated.”
“While we’ve made significant progress in growing our digital subscriber base and developing other sources of revenue, it is not yet enough to offset the losses,” Argentieri added. “The economy is in crisis and it’s become clear that we need to make some difficult changes in order to meet this challenge.
“Our hope is that these will be temporary measures as we seek to stabilize our operating budget and begin planning for a return to business as usual – or a modified version of it, as humankind adapts to life with COVID-19.”
In a letter to subscribers last week, the L.A. Times’ executive editor Norman Pearlstine alluded to the sudden loss of advertising as well.
“With so many businesses in the region and around the world dealing with this crisis, most of our advertisers are unable to continue advertising,” Pearlstine wrote, adding that subscriber revenue had become more important than ever.
The L.A. Times is far from alone in its efforts to cut costs amid the economic fallout caused by drastic measures in states throughout the U.S. and countries across the world to limit the spread of the coronavirus. Layoffs, mainly at local newspapers throughout the country, could be as high as 28,000, according to an estimate from The New York Times. And magazine and digital publishers, large and small, have laid off, furloughed and cut pay for staffers and executives. Playboy magazine even ceased its print operations after almost 70 years because of the disruption to its business from the coronavirus measures.
Overall, measures to prevent spread of the coronavirus that have caused a near-total shutdown of the U.S. and global economy, are set to take many tens of billions of dollars from the media community through a decrease in advertising by brands. Ad spend in the U.S. alone is already expected to lose nearly $100 billion dollars in ad spend this year. And the managing director of the International Monetary Fund predicted last week compared the coming economic impact to the Great Depression.
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