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Commercial Appeal Layoff Announcement Postponed

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Life is more stressful than usual for many employees at The Commercial Appeal these days. Last week the newspaper's management announced that it would lay off 23 Newspaper Guild-covered employees and three employees covered by the pressman's union effective March 12. The employees being laid off were originally supposed to be notified on Monday, March 2. But recent, not entirely clear events, have resulted in the notification date being been pushed back to March 27.

It was originally announced that 18 of the employees being laid off would come from the newspaper's editorial department. That has changed with the voluntary retirement of business reporter David Flaum, and the resignations of business reporter Cassandra Kimberly and Alex Doniach, who covers Shelby County government.

According to Mediaverse-Memphis, a blog that covers Mid-South media, the delay was caused by a protracted debate over who on the editorial staff will be laid off. Additional sources suggest that the management is waiting to see if there will be more voluntary resignations. Rumors have also been floated about everything from troubles with accounting software to fears that laid off employees might cause trouble in the workplace between the time of the the announcements and the time that the layoffs actually take effect. The truth is most likely some combination of all these things.

Several sources inside the building have said that, although nobody wants to lose their job, there are reasons to be envious of those who have decided to resign. They no longer have the threat of termination hanging over their head at a time when everybody seems to be concerned about the future of the newspaper industry.

To cut costs, CA management reduced the size of the newspaper, laid off 9 percent of its workforce, and ceased home delivery to thousands of households in surrounding cities in 2008. 2009 began with management taking paycuts of up to 15 percent.

The CA isn't unique. Shrinking of the physical product and staff downsizing is happening at daily newspapers all across America. That and a seemingly endless stream of articles announcing the death of print journalism might lead consumers to believe that daily newspapers are rapidly going the way of the dinosaur. Yet, amid all the doom and gloom, most newspaper companies continue to post what in virtually any other industry would be regarded as robust operating profits.

So why is a profitable business model failing? In spite of what you'll read in the papers, it's got very little to do with the internet or theories that people don't read anymore. In almost every case, the papers that are suffering the most are those with massive corporate debt. They have "borrowed" themselves into a hole to expand their media empires.

According to Advertising Age magazine, the McClatchy newspaper group posted a 21 percent operating profit in 2008. But the media giant still had to lay off employees and freeze pensions in order to maintain profit margins, while paying back its nearly $2 billion in debt from the purchase of the Knight-Ridder news service.

Scripps, The Commercial Appeal's parent company, used its publishing success to launch a battery of cable television channels, and to develop original content for those channels. In 2008, the newspaper division and the cable division became two separate corporate entities, both of which have since lost stock value. That's bad news for stockholders, but it doesn't necessarily reflect negatively on the future viability of daily newspapers.

--Chris Davis

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