The New York Times sent shock waves through its Renzo Piano-designed headquarters Wednesday with a plan to shed 100 newsroom jobs, or about 7.5 percent of the editorial staff.
In an equally seismic blow, the Times also conceded that some digital efforts have flopped.
NYT Opinion, a mobile app with columns and op-ed content, will close because it failed to attract enough subscribers, Publisher Arthur “Pinch” Sulzberger Jr. and Chief Executive Mark Thompson co-wrote in a memo to staff.
The moves are part of a plan to shave as much as $30 million in costs, sources said, with the Gray Lady expected to report flat ad revenue for the current quarter.
“The job losses are necessary to control our costs and to allow us to continue to invest in the digital future of the New York Times, but we know that they will be painful both for the individuals affected and for their colleagues,” Sulzberger and Thompson wrote.
The deep cuts could also pressure the company to streamline the top management structure that includes Vice Chairman Michael Golden, Sulzberger’s first cousin.
“Between the three of them, they are making $15 million a year and that’s a lot of money for what is essentially a one newspaper company,” said one source.
Digital advertising is expected to expand 16 percent in the quarter, which won’t offset the decline in print. The latter was off in July and August but picked up in September, enough to make the third-quarter ad revenue roughly flat.
But operating costs increased in the low- to mid-single-digit range, “and as a result, our profitability for the quarter and the year as a whole is still expected to be lower than last year,” Sulzberger and Thompson said.
The Times will offer voluntary buyouts but said it would resort to layoffs if it doesn’t get enough volunteers.
The cuts appear aimed at getting more senior staffers to exit. Employees covered by the Newspaper Guild will receive three weeks of salary for each year worked, capped at a maximum of two times annual salary, according to a memo from Executive Editor Dean Baquet.
In addition, the company is offering a cash payout of 35 percent of total severance to 20-year-plus staffers.
Shares jumped 9.6 percent to $12.30 on the news.