Early this year amid a US$21.7 million fourth quarter loss, declining revenue and an economy that has shown no signs of improvement, newspaper publishing firm McClatchy announced it was creating a scheme to reduce costs. Today the company revealed the details of this restructuring scheme, which includes job losses, pay cuts and bonus cancellations, according to a company press release.

Today the company announced that 1,600 full-time employees will be made redundant as the company plans to cut around 15 percent of its workforce. The staff cuts will begin at the end of the first economic quarter of 2009 and will occur through severance plans, amalgamation of the company functions and outsourcing of some of the business roles. This will come at an expected cost of $30 million in severance payouts.

The restructuring scheme also involves wage reductions across the company. Chairman and CEO Gary Pruitt will have his base salary reduced by 15 percent, while other executives' salaries will drop by 10 percent. Further cost cutting measures at the boardroom's expense include no bonus payments for 2009, reduction in retainers and meeting fees by 13 percent and no stock awards for 2008 and 2009.

"We have been transitioning steadily from a traditional newspaper company to a hybrid print and online, news and advertising company for some time," Pruitt said in a statement. "The effects of the current national economic downturn make it essential that we move even faster to realign our workforce and make our operations more efficient. We previously discussed a plan to reach a targeted level of cost savings, but given the worsening economy, we must do more. I'm sorry we have to take these actions, but we believe they are necessary.

"While painful, we know these actions are working. Evidence of our cost reduction efforts can be found in our results. Excluding severance and other benefit charges related to our previously announced restructuring plans, cash expenses were down 14.4 percent in the fourth quarter of 2008 and were down 11.5 percent in all of 2008."

McClatchy is the third largest newspaper publisher in the United States, publishing 30 daily newspapers and approximately 50 non-dailies.