Fears that 2020 will be a really bad year for the Chicago Tribune may be turning into a reality already.
On Monday owner Tribune Publishing announced a buyout offer to employees with eight or more years of service — a likely precursor to layoffs throughout the company. It would mark the second round of buyouts and layoffs in two years.
News of the voluntary separation offer, contained in an email from Tim Knight, president and CEO of Tribune Publishing, comes as Alden Global Capital, the New York-based hedge fund known for slashing newsrooms staffs and expenses, flexes its muscles as the company’s largest shareholder. In November Alden acquired a 32 percent stake in Tribune Publishing.
“While it is our desire to retain all our talented employees, we must confront and plan for the significant financial hurdles ahead,” Knight wrote, citing continuing “industry-wide revenue challenges.”
A spokesman for Tribune Publishing provided a copy of Knight’s email but declined further comment on the offer.
The union representing Tribune editorial workers said it was studying the plan.
“We're still learning about the buyout offer company executives announced this morning and gathering the information we need to help our members make good decisions,” said the Chicago Tribune Guild statement. “We formed this union to advocate for journalists, and we plan to keep pushing for fair treatment for our members, even when that means looking out for their interests as they decide whether to leave the company.
“What we know for certain is that this company, our readers and our journalists would be best served by a long-term investment in sustainable, high-quality journalism. We remain focused on winning that.”
Earlier, the Chicago Tribune Guild voiced serious concerns about the future under Alden’s ownership.
Citing Alden’s “troubling record of diminishing newspapers’ abilities to cover their communities” and its reputation for destroying newspapers by cutting staffs, a union petition last month said: “To follow Alden’s path would not only undermine employee morale and foment labor conflict but would violate your fiduciary responsibility to shareholders and your duty to maximize the company’s value, to both its customers and to its shareholders, over the long term.”
Here is the text of Knight’s email to employees:
I am writing to announce that the company will be offering a Voluntary Separation Incentive Plan (VSIP) today to all eligible employees across the enterprise. In light of recent company announcements and speculation about the future of the business, I wanted to provide some context as to why this is being offered at this time.
Operationally, we are in a better position now than at any time since spinning off as Tribune Publishing, and the successes we have enjoyed over the last year have allowed us to confidently take on the challenges facing our industry. Most notably, as we reported in our most recent earnings call in November 2019, we’ve achieved significant growth in our digital-only subscriptions--a result of the great cooperation among newsrooms, consumer marketing and digital product.
Although our digital successes provide good momentum, we continue to face industry-wide revenue challenges. A significant amount of our revenue continues to come from our print titles and our commercial manufacturing and distribution business. We value those customers highly, and though revenue from those lines is declining, it’s still critical to our overall financial performance. Since we remain committed to extending the life of those products and services and to serving our home delivery subscribers, we need to anticipate continued print revenue declines by reducing our expenses.
We continue to be aggressive and focused on reducing our costs in real estate and outside services as well as all other non-employee related costs. Further, to reduce expenses and avoid turning to company-wide reductions of the workforce as a last resort, the company is offering the voluntary separation incentive plan to all eligible employees with eight (8) or more years of company service. Details regarding eligibility will come under separate cover only to eligible employees from Maya Bordeaux, our Chief Human Resources & Communications Officer, later this afternoon.
While it is our desire to retain all our talented employees, we must confront and plan for the significant financial hurdles ahead.
As we continue to navigate industry-wide headwinds, I am pleased with our 2019 performance and appreciate the many contributions each of you has made to our success. We are part of an industry in transition, yet because of your perseverance and dedication to our journalistic mission, I remain optimistic about our positioning for a strong 2020.
I sincerely thank you for all you do.
CEO & President