The Philadelphia Inquirer, Oct. 20

Layoffs called 'unavoidable' at Inquirer, Daily News

By Joseph N. DiStefano
Of The Philadelphia Inquirer

Some layoffs are "unavoidable" at Philadelphia Newspapers LLC, which owns The Inquirer, Philadelphia Daily News and Philly.com, publisher Brian P. Tierney told employees in a memo Oct. 20.

Tierney blamed a "permanent" decline in national newspaper advertising that has forced cutbacks at other newspapers and media companies. The size of the layoffs will depend on the outcome of union contract negotiations, Tierney wrote. Contracts covering 2,000 workers expire Oct. 31.

He said the revenue decline was worse than projected when he led a group of local investors who bought the company last summer.

Cash flow has dropped from $100 million in 2004, to $76 million last year, to less than $50 million estimated for 2006, according to Tierney. After interest payments, that leaves less than $10 million "to invest in the business," he said. Without "immediate and dramatic changes", the company won't be able to meet interest payments next year, he added.

Any layoffs would follow a 16 percent reduction in newsroom staffing at the two newspapers in November 2005.

Among other concessions, Tierney wants to freeze the pension plan for advertising, newsroom and circulation workers, combine delivery routes, and reduce press staffing.

The Newspaper Guild of Greater Philadelphia, the papers' largest union, met with Tierney today to discuss new contract proposals from management. A Guild bulletin said Tierney has asked for seniority, layoff and other work rules similar to those in force at Comcast Corp. and other nonunion media companies.

"We're still waiting for their final proposal," said John Laigaie, president of Teamsters Local 628, which represents drivers.

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