Assignment #3

Downsizing- In a business enterprise, downsizing is reducing the number of employees on the operating payroll. Some users distinguish downsizing from a layoff , with downsizing intended to be a permanent downscaling and a layoff intended to be a temporary downscaling in which employees may later be rehired. Businesses use several techniques in downsizing, including providing incentives to take early retirement and transfer to subsidiary companies, but the most common technique is to simply terminate the employment of a certain number of people.

McClatchy Plans to Cut 1,400 Jobs, 10% of Workforce

June 16 (Bloomberg) -- McClatchy Co., owner of the Miami Herald and 29 other daily newspapers, will cut about 1,400 jobs, or 10 percent of its workforce, to save $70 million annually after a record drop in industrywide advertising sales.
The reductions are part of a plan to cut costs as much as $100 million in the next four quarters, Sacramento-based McClatchy said today in a statement. The Miami Herald plans to eliminate 250 positions, or 17 percent of its staff, and the Charlotte Observer will cut 123 positions, or 11 percent, the newspapers reported.
Tribune Co. and New York Times Co. have also reduced staff to save money as companies that historically advertised in newspapers shift their spending to the Internet. Newspaper print ad sales slumped 14 percent in the first quarter, the most on record, the Newspaper Association of America said June 13.

Causes of downsizing:
*Ad sales at McClatchy, which also publishes the Sacramento Bee, fell 17 percent in May after a 15 percent decline in the first quarter.
*The company was hurt by the housing market slump in California and Florida, where it owns eight daily newspapers.
*McClatchy fell 11 cents to $8.04 at 4:01 p.m. in New York Stock Exchange composite trading. The shares have declined 36 percent this year.
*The stock has lost 84 percent of its value since the company announced plans in March 2006 to acquire Knight Ridder Inc., the second-largest U.S. newspaper chain at the time, for $4.1 billion.

The job cuts will come through attrition, employee buyouts and firings.

Reference:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aeB.8az79vQA
http://www.bitpipe.com/tlist/Downsizing.html