- Layoffs At New York Times
- New York Times Pay Cut Memo
Earlier: The New York Times is asking all employees to take a 5% pay cut, according to a memo.
The New York Times sold its jet earlier this month. That and these cost cuts are nice, but they don’t go nearly deep enough.
In October, we put together a 7 step plan to save the company. Those steps were:
- Sell the stake in the building.
- Try to sell the Boston Globe and Red Sox stake.
- Eliminate the dividend.
- Shrink, sell, and/or shut down the regional papers, which are bleeding cash.
- Reduce the size of the New York Times newsroom by 30%.
- Significantly reduce the $1.1 billion of debt–and, possibly, pay it off completely
- Use the breathing room to put a long-term print-to-online transition plan in place.
Steps 1, 2 and — thanks to shady Mexican billionaire Carlos Slim — 6 are already underway. Here’s what we wrote about step 5, which today sort of gets at:
5. Reduce the size of the New York Times newsroom by 30%. This will make the paper comfortably profitable again (for a while). The improved cash flow, combined with the increased liquidity from the asset sales, will allow the company to vastly reduce its debt load, which will reduce the possibility of default (and equity value destruction) in the future. The particular cuts can be made by analysing the traffic to NYTimes.com and see what/who is being read and what/who isn’t. Chances are, 20% of the content and writers produce 80% of the value.