The bleeding continues at McClatchy. The troubled newspaper chain revealed that it is reducing its workforce nationwide by a further 10 percent in an effort to shave some $70 million a year in operating costs.
This news was hardly unanticipated around here, given our earlier reports about McClatchy's staggering $1.43 billion loss in Q-4 last year, followed by the admission of the company's CEO earlier this spring that "we simply can't tell when this decline will end. We must continue to cut costs."
What triggered today's move were the accumulating revenue declines during the first five months of this year -- McClatchy's total revenues were off 14.2 percent and its advertising revenues declined 15.4 percent. Among the papers affected: the Charlotte Observer, which is laying off 11 percent of its workforce; the Miami Herald, which is trimming a staggering 17 percent, or 250 employees from its operation.
The was one bright spot, however. McClatchy's online advertising grew by 11.9 percent in the first five months of 2008. This is a reminder that cutting costs is only one tool at the disposal of media execs in troubled times. An equally important tool is redirecting investments into the faster-growing segments of their businesses.
Accordingly, it's long past time that those concerned with the decline of newspapers stop wringing their hands and devote their energy to helping their companies exploit this powerful new growth opportunity.