New York Times Freezes Wages

Non-union employees at both the newspaper and the Web site will receive no raises in 2009.

The New York Times Company told print and Web employees of its flagship New York Times newspaper this afternoon that non-union staff would receive no pay raises next year.

"Advertising revenues at both the paper and the Web site remain weak and the financial outlook for 2009 is daunting," the staff was told in an internal e-mail from publisher Arthur Sulzberger Jr., obtained by Forbes.com.

Newspaper companies have seen massive revenue declines this year as a result of a weak ad market and continued erosion of their traditional business by the Internet. In October, advertising revenues from its New York Times Media Group, which includes properties such as the Times and the International Herald Tribune, dropped 15.3% over the same time last year. At the time, the company said advertising revenue for the group was down 10.6% over last year for a total of some $900 million.

As a result, the organization has been aggressively trying to cut costs. Earlier this month, the Times announced it was planning to borrow as much as $225 million against its new Manhattan headquarters because of a cash flow squeeze.

In September, it said it would close its wholesale newspaper and periodical distributor, City & Suburban, which delivered the Times and more than 200 other publications to newsstands and other locations in the New York area. And the Times newspaper has consolidated some print sections, such as mashing its sports section into its business section.

Nevertheless, Sulzberger told employees today that efforts are falling short. "We felt it was essential to take this step to further control our costs during these hard times."

Sent: Fri, 12 Dec. 2008 3:09 pm

Subject: Note from Arthur

Dear Colleagues,

The deepening recession and the structural changes confronting our industry
continue to present us with difficult challenges. Advertising revenues at both
the paper and the Web site remain weak and the financial outlook for 2009 is
daunting. For these reasons, we have decided to forgo pay increases for all
non-union employees in the coming year.

The decision to freeze wages at current levels was not taken lightly. For all
of our aggressive efforts to streamline our businesses and to reduce our
expenses, including the consolidation of production facilities, the
restructuring of our newspaper distribution and the Board's decision to reduce
our dividend, we felt that it was essential to take this step to further control
our costs during these hard times.

We remain a great brand, a great organization and a great culture; our
journalism remains the gold standard, not just here but around the globe, and we
reach more people each day on the web than any other newspaper company. With
your help and support, Scott, Bill, Andy, Martin and I are confident that The Times will come through this difficult period, and we will emerge
stronger than ever.

Arthur

Source : Forbes

[tags : recession bankrupt collapse retrenchment financial news collapse stagnation economic slowdown financial collapse world recession global recession layoff job cut]