Ad recession prompts US press to axe jobs

American newspapers and magazines are laying off more workers than ever before.

Three of the biggest papers in the former Knight Ridder chain, once the second largest group of papers in the US, are firing staff. The San Jose Mercury is laying off more than 100 workers – that's about a tenth of its workforce – and includes 40 of its newsroom staff, The Philadelphia Inquirer and its sister paper The Daily News have warned the staff that some cuts are inevitable. At the Contra Costa Times they started at the top. The editor has been fired.

Owners of virtually every big newspaper in the country are sounding alarm bells. Mainly, of course, because of the big drop of in advertising. Many are saying the past three months have been the worst that anyone remembers. And there is not much sign of it getting better. At least three big newspaper groups, the New York Times, the Tribune Co. of Chicago and the Belo Corp — which owns the Dallas Morning News and the Providence Journal — all reported lower ad income in the third quarter of this year.

Some companies are even selling assets. The NY Times, whose profits dropped almost 40 per cent in the third quarter and which expects the slowdown to continue, is selling some of its TV stations. There is even talk it may sell its papers in Boston, including The Boston Globe which has lately been a big money-loser. The Tribune Company has even put its company jet up for sale.

Apart from layoffs, some companies — who in addition to a drop in ads are also seeing a big drop in sales — are seeking a freeze on pensions and even reducing holidays from five weeks to three, in an effort to meet their budgets.

If there is any silver lining, it's a prediction that there may soon be a drop in the price of newsprint, which has been climbing steadily for the past four years. Now the climb has stopped and there are expectations the price may start rolling back. One good sign: Atibi, one of the world's leading newsprint companies, which had planned raise its price of newsprint by $40 to over $650 a metric ton, decided at the last minute to cut the increase by half. Other companies dropped the increase completely.

"Maybe the tide has turned," said the head of one newspaper company optimistically. But it may also be due, some experts say, to the fact that some newspapers are cutting the size of their pages – and reducing the amount of newsprint they use. As a result, newsprint consumption in the US has dropped almost eight per cent this past year. And there is one other factor: Some American newspapers are toying with the idea of buying their newsprint from China.