McClatchy Follows BuzzFeed, Vice, and Others in Cutting Staff

By Chuck Strouse

McClatchy publishes newspapers across the nation, including the Miami Herald, Kansas City Star, Idaho Statesman, Fresno Bee, and Charlotte Observer. Last August, the company cut about 3.5 percent of the staff, nearly 140 employees.

The cuts were not unexpected after a deal with the Tribune Company fell apart several months ago. Print revenues at daily newspapers, as well as web-based publications, have been declining recently.

McClatchy's move follows cuts at the online news outlet BuzzFeed, which last week gave pink slips to 200 employees including the national security staff, and 800 people in the media division of Verizon — the phone company that owns Yahoo, HuffPost, and TechCrunch. Gannett is letting go of 400, and Vice Media this morning announced the layoff of 10 percent of its staff.

"We are changing the size of the workforce to align with the revenue," says Jeanne Segal, McClatchy's director of public relations and communications.

I’m writing to share with you the next organizational steps in McClatchy’s digital transformation.

First, some background: In the past two years we have made significant progress during a time of continued upheaval in the media industry. We achieved two big milestones of our transformation:

We accelerated the digital ‘cross-over’ in advertising revenue (the point at which digital advertising exceeds print) by several years;

We continue to see quarterly acceleration in our digital-only subscribers.

In such areas as product, digital audience, digital ad sales, regional and national production and — of course — our journalism, our work as #OneTeam is driving results.

But — as always in a challenging business transformation — there is more to be done.

Central to our transformation is accelerating our revenue potential. With that in mind, we are rolling out two major initiatives:

Driving our company to a functionally-based organizational structure in targeted strategic areas;

Launching a voluntary early retirement program for qualified colleagues, as we continue to align the size of our workforce to the changes that come with digital transformation.

Functional Realignment

Successful digital enterprises are organized functionally. That is the lesson I’ve learned from my career in first-rate journalism organizations and first-rate digital platforms at scale. And I can say — with conviction — that functional organizations tend to be more agile, more efficient and more flexible. They provide a crisper focus on our customer needs and opportunities.

Thanks to our efforts in centralization and regionalization, a number of our groups are already organized by function — such as finance and the people teams — and now we’re taking a page from such digital companies as Google and Microsoft to further group teams by expertise. This will accelerate decision making, increase professional skills development and create operational efficiencies. Bringing together the talents and energy of like-minded colleagues will create new energy and innovation to apply to our revenue challenge.

I would like to highlight three areas of strategic importance as key drivers of future revenue whose performance we’ll look to enhance as a result of these changes:

Ad Revenue Council: I will lead a new management group to ensure that our advertising revenue goals are met, identify new revenue streams and support the work of key executives leading revenue teams. Members of the Ad Revenue Council are: Mark Zieman, Nick Johnson, Andrea Rowan (General Manager, excelerate), and our regional publishers; Alex Villoch (East), Sara Glines (Carolinas), Tony Berg (Central) and Gary Wortel (West).

Advertising Team: We are centralizing our advertising operations under Mark Zieman and Nick Johnson’s leadership to drive consistency and best practices across each of our sales channels. Nick has worked collaboratively with sales leaders across the enterprise to further refine our offer to advertisers, agencies and brands and rethink how the ad team is organized. They have reimagined a more streamlined and efficient structure to drive revenue, improve communications and increase sales accountability.

Customer and Product Team: We are placing a renewed focus on our customers by bringing our Product, Audience and Technology teams together under the leadership of Scott Manuel. Combining these functional areas will boost our ability to offer new, innovative ways to deliver to our customers the journalism they want at the time they want it — be they loyal subscribers or “casual visitors” experiencing our news sites for the first time. Our technology investments are accelerating our digital transformation and the combination of Dan Schaub’s Audience organization with Scott’s team will enhance data-driven tactics to better delight our customers and grow subscription revenue faster.

On the ground, our regional publishers will continue to play an instrumental role in ensuring that these functional groups communicate and cooperate across their regions, as well as leading the effort to meet — and exceed! — our local and regional financial goals.

The rest of the organization will continue to function as it has, with a few exceptions. A deeper dive into the details surrounding the changes can be found here. These changes and others are also captured in the attached organizational chart. If your team is impacted by this reorganization, stay tuned for more details from your leadership team.

Voluntary Early Retirement Program

Approximately 450 of our colleagues will receive a voluntary early retirement offer today via email. Colleagues who receive an offer will have the opportunity to participate in webinars and consult with representatives of the People team directly, to determine if this opportunity is right for them and their families. We’ve taken this action with intention, deliberation and respect for the contributions these colleagues have made to our company. It is important to us that they are empowered to decide the next steps on their career paths.

This will be a one-time opportunity; we do not anticipate another voluntary early retirement program. Deadline for electing to participate in the program is February 19, 2019.

Forward Steps

The changes outlined above will help us get to growth faster in a digital company that will be smaller for the foreseeable future. They are the culmination of the enormous progress McClatchy has already made in our transition to a digital future; progress that in many ways has paced the industry and would not have been possible without the effort, talent and dedication of the people reading this note.

But I’m also aware that transitions are stressful. Our mission to transform our company is vitally important, but never easy. With that in mind, I want to extend a sincere thank you to everyone at McClatchy, our #OneTeam. Your passion for local journalism and the benefit it brings to our communities — and our democracy — is what binds us all together. It’s the purpose of McClatchy, and it’s never been more important.

Thank you for being part of our success in this journey and we appreciate your continued collaboration, diligence and flexibility.