The New York Times is to cut about four per cent of its work force, or 500 jobs as a result of weak advertising revenues, it has announced.
It also warned that weaker newspaper advertising and rising costs could reduce earnings to less than half of Wall Street forecasts for this quarter.
The New York Times building in Manhattan. REUTERS/Peter Morgan.
Meanwhile, another media company, Knight Ridder has announced it also plans to cut staff as the newspaper industry struggles with a slack advertising market, increased newsprint costs and circulation declines with readers turning more often to the Internet for news.
Shares in the New York Times fell almost two per cent in after-hours trade as the company announced its second job cut programme since May, when it planned to eliminate 190 positions.
The publisher of the New York Times, Boston Globeand International Herald Tribunewarned that third-quarter earnings per share would be in a range of 11 cents to 14 cents compared with 33 cents a year earlier. The forecast includes expenses of 4 cents to 6 cents per share for its previous job cut programme.
The company will cut about 500 jobs over six to nine months beginning in October, including 250 positions at the New York Times Media Group and about 160 at its New England Media Group. The reductions include about 80 newsroom positions in total - 45 at the Timesand 35 at the Globe.
Separately, Knight Ridder said it would cut 100 jobs combined at its Philadelphia Inquirerand Daily Newsnewspapers. It warned last week of a 20 per cent quarterly profit decline.
The New York Timesand rivals have expanded their online offerings to combat falling margins, but the scope of Internet revenue has yet to replace newspaper advertising. In August, the Times' About.com unit helped push total advertising revenue up 1.7 per cent. Excluding the information site, ad revenue fell 1 per cent.
Thomas Weisel Partners analyst Christa Quarles
"If the (ad) budgets are getting cut, they are not getting cut online," said Christa Quarles, analyst at Thomas Weisel Partners who rates New York Timesshares at "peer perform". "How do you transition your core (newspaper) business to being online? I don't think anyone has solved that creative-destruction dilemma yet."
New York Times Chief Executive Janet Robinson said the company would "aggressively reduce costs" across its businesses and grow its Internet operations to offset the weak advertising market.
"In September, our largest month in the quarter, advertising has been challenging," she said.
"We continue to benefit from very strong double-digit advertising growth at our digital operations, particularly About.com," Ms Robinson said. "But elsewhere, advertising is weaker than expected."
The New York Timessaid it was too early to assess the cost of the latest job cuts.