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Photograph by Felipe Buitrago
THE NEWS IS NOT GOOD: As the head of the Newspaper Guild in San Jose, Luther Jackson represents hundreds of Mercury News employees whose job security hit a new low with the announcement of deep cuts throughout MediaNews' Bay Area papers.

Panic Room

Merc employees wait to see how hard companywide cuts at MediaNews will hit the newsroom

By Erin Sherbert

HUNDREDS of San Jose Mercury News employees will have to wait a week—until Thursday, March 6—to see how hard the ax will fall. And how many times.

That's when executives of MediaNews Group are expected to announce the latest round of layoffs at Silicon Valley's beleaguered daily and its 25 other Northern California newspapers.

Meanwhile, Merc staffers have until Friday, March 3, to apply for a one-time buyout deal that would provide them with severance packages to soften the pain of unemployment.

Last week, company executives at MediaNews fired off a memo encouraging all eligible employees to get in line for the buyout. The memo points out that merely applying for the buyout doesn't exclude employees from layoffs, but that more buyouts could mean fewer layoffs. The severance offered in the buyout deal is double what it would be if employees are laid off.

Company executives will pinpoint the number of firings once they tally up how much they saved through buyouts.

Union members are not eligible for the deal.

"It will be pretty nasty," said Sylvia Ulloa, a designer at the San Jose Mercury News and president of the San Jose Newspaper Guild.

"People are stressed, some people are angry, and some are really afraid, and a whole lot have been looking for something else because they are done. This is not a company that people want to work for."

In last week's memo, executives said a bad housing market, a lingering recession and declining ad revenues mixed with increasing newsprint costs have made it impossible for MediaNews to dodge staff reductions.

"It is easy to get discouraged, to wonder about the future of newspapers and companies like ours," John Armstrong, president and publisher of Bay Area News Group—East Bay (a division of MediaNews Group) said in the recent memo.

"Personally, I still believe in the power of newspapers and, specifically, the power of our newspapers and websites."

Rumors had been swirling around newsrooms in the Bay Area for weeks as reports circulated that MediaNews Group was at it again, making plans for another round of big cuts to its newspapers.

But nobody quite expected what was to come.

So employees are bracing themselves as MediaNews executives move ahead with what may be the most far-reaching of its recent moves to strip away newsroom resources across the Bay Area.

They wouldn't say just how many jobs were on the line, but they described the cost-cutting scheme as "significant." Employees will know the extent of the damage to come in a matter of weeks.

The company extended buyouts to nearly every employee, from the San Jose Mercury News to the Contra Costa Times, both of which have already suffered serious cuts in their newsrooms since Dean Singleton, owner of MediaNews Group, bought the papers two years ago.

"It's shocking," said Luther Jackson, executive officer of the San Jose Newspaper Guild, "the fact that it is so wide-sweeping."

Fewer reporters and copyeditors will save the media company money, but only in the short run, according to some media analysts. These quick fixes won't keep Bay Area newspapers afloat as they continue to lose advertising dollars to Internet giants such as Google and eBay.

If anything, these cuts are only contributing to the calamity of local newspapers, where readers are getting fewer stories about their communities.

"The irony is that the few subscribers left will drop as the product declines," said Bill Briggs, director of the school of journalism and mass communications at San Jose State University. "No one has the solution yet, but I wouldn't look to MediaNews to lead the way."

The news of more cuts has hit the San Jose Mercury News hard. The mood is pretty gloomy among staffers at the paper, which has lost stability with major turnover in editorial leadership and in its executive ranks over the last year.

Merc staffers have seen their newsroom cut in half since 2001. The Palo Alto bureau was closed, and the San Francisco bureau has been whittled down to one person.

In December, MediaNews announced it would lay off roughly 100 employees at the Merc. At that time, the union made concessions to save several of the newsroom jobs, forgoing vacation accruals and agreeing to pay into health plans, according to union representatives.

Last year, 38 newsroom employees were laid off. And now the company is making plans to relocate the newspaper's copy desk, consolidating it with other MediaNews papers in the Bay Area. And the cuts probably won't stop there.

Already, San Jose readers are seeing fewer stories about their areas. They more often than not find Hayward, San Mateo and even cities as far away as Brentwood dominating the paper.

"I think there will be greater public and private corruption that we may not hear about until long afterwards," said John McManus, director of, a San Jose-based media research website. "There will be more rewritten press releases and less coverage of schools, city hall and the things we have come to rely on newspapers for."

It's not just happening in the Bay Area. Across the nation; newspapers are struggling to keep their place in the media world.

But for newspapers to survive, they will have to bite the bullet and start charging to view stories online, McManus said. The way it could work is newspapers would charge readers per story or they could buy a full subscription to access the whole newspaper online, he said.

That might help boost circulation, but it likely won't be enough to spare newspapers from continual cuts. In San Jose, guild members are hoping to reshape the way MediaNews funds its papers. Instead of cutting, cutting, cutting, newspaper companies should look to partner with foundations, community organizations and workforce investment boards to help put out the product, said Jackson, San Jose's newspaper guild leader.

"We would like to see more investment strategies other than cutting," Jackson said. "We will be competing against smart folks like Google with deep pockets. How can we compete effectively with them unless we invest in the future?"

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