McClatchy, to be de-listed? by gimleteye

Bloomberg: McClatchy Co. will eliminate 15 percent of its workforce, slash executive and director pay and halt bonuses after the U.S. economy shrank at its fastest rate in 27 years last quarter. (Click 'read more')

McClatchy to Cut 15% of Jobs, Sees $30 Million Charge (Update1)

By Greg Bensinger

March 9 (Bloomberg) -- McClatchy Co. will eliminate 15 percent of its workforce, slash executive and director pay and halt bonuses after the U.S. economy shrank at its fastest rate in 27 years last quarter.

The publisher of the Sacramento Bee and Miami Herald plans to cut 1,600 jobs throughout the business, starting this month. McClatchy expects about $30 million in severance costs, it said in a statement today.

McClatchy has eliminated its dividend, halted matches to employee 401(k) funds and froze employee pension plans after its advertising revenue plunged 18 percent last year. It may lose its stock listing if it doesn’t lift its share price.

Elaine Lintecum, McClatchy’s treasurer, declined to say how much the company expects to save. Each of the company’s roughly 80 daily and non-daily newspapers would determine salary cuts and other savings, she said in an e-mail.

McClatchy, based in Sacramento, California, plunged 13 cents, or 22 percent, to 46 cents at 9:58 a.m. in New York Stock Exchange composite trading. The shares dropped 15 percent this year before today.

Chief Executive Officer Gary Pruitt’s base salary will be cut by 15 percent and he, like other executives, won’t receive a 2009 bonus, the company said. Pruitt’s salary in 2007 was $1.1 million.

Board members’ cash compensation will be reduced by 13 percent, and they won’t receive any stock awards for 2008 or 2009, McClatchy said.

An announced reduction on March 5 of about 130 jobs, or 12 percent, at McClatchy’s Star-Telegram in Fort Worth, Texas, will be counted toward the 1,600 cuts, Lintecum said. The newspaper said it would slash salaries as much as 10 percent.

If the U.S. recession persists through the first half of this year, it will the longest since the Great Depression. The economy shrank at a 6.2 percent pace in the fourth quarter of 2008, the weakest performance since 1982.

To contact the reporter on this story: Greg Bensinger in New York at gbensinger1@bloomberg.net