Austin American-Statesman Pruning Payroll

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Fred Zipp
Fred Zipp

‘Austin American-Statesman’ Cutting Staff Again

Voluntary Job Buyouts Offered to 167 Employees

The ever shrinking monopoly daily newspaper that serves Austin and Central Texas is once again reducing its workforce. While the final results won’t be final for a week, some 40 or more employees in the newsroom were among those who got early buyout offers and could be leaving.

This cutback comes more than two years after the Austin American-Statesman offered a voluntary retirement program to 130 employees in January 2009. At that time the Statesman employed 906 full-time and part-time workers. A dozen people in the editorial department took that offer—including Pulitzer Prize winning cartoonist Ben Sargent and journalists with up to 44 years of experience. That loss was sorely lamented by Editor Fred Zipp in a March 15, 2009 column, which indicated 71 people retired from the company.

This latest reduction in force would leave the paper with about 700 employees, a drawdown of about 22 percent since 2009, and a reduction of about five percent from the current workforce of 740.

Fred Zipp
Fred Zipp

Zipp told The Austin Bulldog that employees who got the offers had until 5pm today to apply and the company has a week to review the applications. The company has reserved the right to limit departures in areas thought to be critical, he said.

“It’s not the huge talent exodus that I had feared,” Zipp said. “I hate to lose anybody and we are losing some good people here,” he added. “It’s regrettable but necessary as we find the right size while the business stabilizes.”

The latest announcement was buried in the bottom left corner of the June 2, 2011 business page.

Jane Williams
Jane Williams

Jane Williams—who took the job as Statesman publisher in January—said in that article the voluntary separation program offers up to a year’s severance pay for employees at or near retirement age. Williams said the Statesman is making the offers to reduce costs at a time revenues are drifting lower.

Employees may retire at age 55, Chief Financial Officer Eddie Burns told The Austin Bulldog. Burns predicted about 20 percent would take the offer, and said the results “are pretty close to that number, based on the feedback I’m getting.”

Burns said about 25 percent of the early buyout offers went to employees in the newsroom, which makes up about the same percentage of the newspaper’s workforce.

The early buyout offer is apparently being applied throughout the Cox-owned local newspapers, including the 10 community newspapers. Editor Ed Allen of the Westlake Picayune said he received the offer, too, but does not intend to take it.

Newspaper industry in distress

The Statesman’s latest round of cuts was announced just as the FCC Working Group yesterday released its report on the future of the media. Titled “The Information Needs of Communities: The changing media landscape in a broadband age.” It’s a thumping 365 pages long.

The section on newspapers alone runs 24 pages. Key findings:

• Newspaper advertising revenue dropped 48 percent between 2005 and 2010. All major segments of newspaper advertising revenue are shrinking rapidly, including national, retail and classified, while online ad growth is relatively flat.

• From 2005 to 2010 online ad revenues for the newspaper industry grew more than $1 billion but print advertising lost $24.6 billion.

• The industry’s annual spending on reporting and editing capacity dropped by $1.6 billion from 2006 to 2009, a reduction of more than 25 percent.

• The number of full-time journalists at daily newspapers fell from a peak of about 56,900 in 1989 to 41,600 in 2010.

• Newspaper circulation peaked at 62.8 million in 1985 and by 2009 had fallen to 45.7 million.

• Between 2007 and 2010 about 250 newspapers closed or eliminated print editions.

Statesman not immune to industry woes

The Statesman’s first round of buyouts offered in January 2009 came just three months after parent company Cox Newspapers Inc. announced in September 2008 that it had decided to sell the Statesman and 28 other newspaper properties, including the 10 community weeklies in Central Texas.

The newspaper’s for-sale sign was hung out for a year before the August 7, 2009, announcement that it had been taken off the market. “It just did not make sense to sell,” then publisher Michael Vivio stated. Executives of Atlanta-based Cox Enterprises Inc. said the offers the company had received were not high enough.

“Cox said from the beginning that it would not preside over a fire sale,” Vivio said at the time. “This is a profitable company, and it just did not make sense to sell it for the prices offered.”

“Newspapers face serious challenges from a host of smart competitors, but that’s nothing new,” Zipp wrote at the time. “Radio and television rose from nothing to become formidable foes, just as Internet-based businesses have done. We figured out how to stay in business then, and we’ll do it again.”

The latest round of employee buyouts indicates that profits may not be what they were, even in mid-2009, when efforts to sell the newspaper were aborted. A significant factor in reduced profitability is the long-term hemorrhaging of subscribers.

In November 2000 the Statesman’s average daily circulation was 187,789 for Monday through Saturday editions, and 242,031 on Sundays, according to a report the newspaper published.

Last December, the average daily circulation for Monday through Saturday was 136,980, said Harry Davis, Statesman vice president of circulation, and 163,539 on Sundays. Online paid circulation is 1,500, he said.

The latest circulation figures represent a loss of 50,809 daily subscribers (27 percent) and 78,492 Sunday subscribers (32 percent) since 2000.

This report was made possible by contributions to The Austin Bulldog, which operates as a 501(c)(3) nonprofit to provide investigative reporting in the public interest. You can help to sustain The Austin Bulldog’s investigative reporting by making a tax-deductible contribution.