NEW YORK - It is a challenging time for newspaper industry, as consumers transition to online, digital ad gains cannot compensate print losses, all exacerbated by current economic downturns, The New York Times Company announced at the 36th Annual UBS Global Media and Communications Conference Tuesday.

The Times will focus on the following strategies: introducing new products and services in print and online, strengthening digital research and development capability, vigilantly managing costs, and rebalancing the company's portfolio through acquisitions and divestitures, said Janet Robinson, president & chief executive officer.

The publisher has been aggressively managing cost by securing greater efficiency and improved productivity. The company consolidated plants in the New York area in 2008, and will continue to do so in Boston in 2009. It is also working to streamline and standardise operations, as well as reduce headcount and lower production and newsprint costs.

Headcount declined 12 percent over past two years, or down 8 percent over last year, according to Follo. However, employees in digital operations actually increased.

The page size for The Times, the Globe, and four regional papers have been reduced in 2007, as well as eight regional titles in 2008, which save an estimated $12 million and $1.4 million annually, respectively, for the company, according to Senior Vice President & Chief Financial Officer Jim Follo.

In addition, "we're shifting away from less profitable circulation and retaining most profitable," to achieve higher margins despite declines in overall volume, Follo added.

The digital business is vital for the publisher. As of October year-to-date, digital revenues were up 9.6 percent, and are expected to account for 12 percent of total company revenues, Robinson said at the UBS Conference.

In terms of advertising for next year, it is "going to be a very different year" from 2008, which was solid for the first three quarters of the year, according to Follo.

"There is no doubt that 2009 will be among the most challenging years we have faced and more steps will be needed. We believe that through our revenue initiatives, expense cuts and the steps we are taking to improve our financial flexibility, the Times Company is well positioned to weather the challenges next year is expected to bring," said Robinson.