REUTERS - The New York Times Co (NYT.N) said it would cut jobs, including about 7.5 percent of newsroom positions, to slash costs as its print advertising revenue dwindles and new products - while “journalistic sensations” - fail to live up to expectations.
The company’s shares rose as much as 10 percent to $12.36 on the New York Stock Exchange.
The publisher will cut 100 newsroom jobs and a smaller number of positions elsewhere, offering buyouts and resorting to layoffs if enough employees do not leave voluntarily, according to a letter to staff.
NYT Opinion, a mobile app dedicated to opinion content, will be shut down as it is not attracting enough subscribers, Executive Editor Dean Baquet said in the letter.
“We will also redesign the magazine, create new journalistic features like the Upshot and First Draft, and adapt our journalism to a world where an increasing number of readers find us on mobile,” he said.
The Upshot is a section offering analysis and data on politics, policy and everyday life, while First Draft focuses on fast-paced political news.
The Times has cut jobs several times over the past six years - 100 in 2008, another 100 in 2009, and 30 more at the beginning of 2013, according to an article on its website on Wednesday.
Despite this, its newsroom staff has risen to about 1,330 from about 1,250 at the end of 2013, said the article. Some of this is due to new jobs in its digital business.
Many print media companies have reduced workforce this year as readers increasingly move online for their news fix.
Reuters, citing a source, reported in February that magazine publisher Time Inc would cut about 500 positions as it prepared to spin off from Time Warner Inc (TWX.N).
Gannett Co Inc’s (GCI.N) USA Today eliminated 60-70 jobs in September, with about half of these jobs being in the newsroom.
The New York Times said it would invest heavily in mobile, audience development, digital product portfolio, advertising and targeted areas of print over the coming months.
Digital ad revenue is expected to rise by about 16 percent in the third quarter, driven by smartphones and video, but overall ad revenue is likely to stay flat, the publisher said.
The Times estimated that it net added more than 40,000 digital subscribers in the quarter, the highest quarterly additions since 2012.
A sense of stability in the digital businesses will boost the stock, Jefferies LLC analysts wrote in a note, but they warned against relying on just one quarter of improvement.
The company’s second-quarter revenue fell as print ad revenue declined.
“Print advertising is notoriously volatile and the third quarter was no exception,” the Times said on Wednesday.
The company said it expected a low- to mid-single digit percentage rise in third-quarter operating costs - excluding severance - which will hurt quarterly and full-year profits.
Additional reporting by Soham Chatterjee, Anya George Tharakan and Arathy S Nair in Bangalore; Editing by Kirti Pandey