St. Petersburg Times announces yearlong pay freeze for all staff, retirement incentive for staffers over age 50

The St. Petersburg Times announced this morning a yearlong pay freeze for its staff, along with an offer for "enhanced pension benefits" for staffers over age 50 with more than five years' service at the company. This was a long-rumored move, particularly after the slimming of the paper this month created an edition which requires fewer people to produce.

The goal, said Times editor, CEO and Chairman Paul Tash in a letter to staffers this morning, is to find "a graceful and humane way for the company to reduce its staffing levels." If the incentive offer doesn't produce enough cost savings -- Tash did not outline specific savings goals or staffing reductions -- the company may have to use layoffs to cut staff costs further.

The big question, which no local newspaper executive can answer yet, is whether the Tampa Bay market can still support two newspapers. And if not, which one will survive?

Already, the Times has reduced staff from 1,500 people two years ago to below 1,300 currently. Staffers have until July 28 to sign up for the program, and must retire by Aug. 31.

But Tash doesn't define the retirement incentives as a buyout. "A buyout is when you pay people not to work," said Tash, who has long opposed such programs. "This is just making it easier for people to retire if they choose." Unlike some buyout programs, any staffer who is determined to take the retirement incentive can do so -- staffers are encouraged to speak with department heads to figure out their own best strategy.

The incentives: An additional five years of age and service added when calculating a retire's pension. Health coverage is free until year's end. And staffers get a week's pay for each year of service, capped at 20 weeks.

The pay freeze begins Sunday; only staffers promoted to new jobs with expanded responsibilities will get pay raises, which must be approved personally by the company's top executives. Those who have already received pay raises this year will instead forego a raise in 2009. Tash also noted he has elected to reduce his pay by five percent while the pay freeze is in place, and that Times executives have had a pay freeze in effect since the start of 2008.

He said he hopes to know soon after the July deadline for taking the incentive whether involuntary job reductions will be necessary. "Weeks rather than months, I hope,"he said of the timeframe. "I know people are anxious."

"Some of you know my aversion to a general pay freeze, for example, though I have come to believe that circumstances require it," Tash writes today. "As difficult as these steps are, they also demonstrate our resolve to meet these challenges and surmount them."

Click below to read the full memo:

Dear Colleagues,

As you know, we are navigating a period of historic change and challenge. The new architecture of the daily Times – known internally as Project Flagship – is a major effort to adapt our efforts to the needs of our customers while reducing our expenses. I am extremely encouraged by the early reaction and results.

The new daily edition, in combination with other steps we have already taken, requires fewer people to produce it. Over the last few years, we have relied mostly on attrition – the routine departure of people to other jobs, other places or retirement – to reduce the size of our staff. Two years ago, the Times employed more than 1,500   fulltime staffers. Today, that figure stands below 1,300. Nevertheless, payroll and benefits remain our biggest single expense.

The recent changes to the daily Times provide the opportunity to further reduce staff levels, and this difficult economic climate demands that we move faster than the pace of normal attrition.

As a result, the company will offer a program of enhanced pension benefits for eligible staffers who sign up by July 28 and retire by Aug. 31. The Human Resources department will provide complete information about this program, with specific detail for staffers who are eligible: those at least 50 years old, with at least five years of service. Once this offer expires, the standard retirement benefits resume.

In my view, this voluntary program is a graceful and humane way for the company to reduce its staffing levels. I believe it will be attractive to many staffers, especially to some who may be considering retirement already. Depending on response, however, we may still need further reductions in our payroll costs, and that could include lay-offs. We would come to that result with reluctance, having taken other steps.

Those of us who remain Times staffers – and that will be the great majority of those on the staff today – will make our own contribution to the common good by giving up pay increases for one year. Starting this coming Sunday (June 1), there will be no raises except for staffers promoted to new jobs with bigger responsibilities, and those exceptions must be approved personally by Marty, Neil or me. Those who have already received raises this year will forego them in 2009.

In a time of rising prices for medical care, fuel and food, I understand that this pay freeze will cause hardship for some staffers. I deeply regret that reality, but as staffers, our economic security depends ultimately on the health of our company. For Times executives, a pay freeze has been in place since the beginning of this year. To honor my personal responsibilities, I have instructed the finance department to reduce my pay by five percent while this freeze is in place.

You would be right to see these actions as a measure of the challenges before us. Some of you know my aversion to a general pay freeze, for example, though I have come to believe that circumstances require it. And yet, as difficult as these steps are, they also demonstrate our resolve to meet these challenges and surmount them.

Getting through this stretch will not be easy, and it will take everyone’s best efforts, but I remain fully confident about our prospects. This is a great company, with a proud history and a strong voice in the Tampa Bay region. Thanks for your contributions to its future.

Comments

[Wanderlie]

I know the Times is a private company, but could it perhaps release its true financial numbers. The execs seem to get a free pass by simply saying that times are tough and revenue is down.. But, how down? I mean, is the Times still making a profit, and simply not making enough profit? Or no profit at all? Or losing money like a sinking ship.

I think I would be more sympathetic if I knew the real figures. Plus, if the Times is owned by a "not-for-profit" intitute and not a money-hungry board and beholden to Wall Street, then who cares how much money the newspaper does and does not make.. Remember, the Times promise is to "Simply tell the truth." (or something like that) Its says nothing about making money. Besides, when Nelson P gave ownership of his beloved paper to a not-for-profit think tank back in the day, I gotta think he did that to take out the whole money-making part of the equation... Right?

[Corey]

Agreed, Eric, your ownership structure has provided you that time. My point is that these steps were somewhat inevitable and don't be surprised by addtional cost-cutting measures in the near future. Newpapers really need to think to how they are going to run their business's in the future, and I'm sure the Times is fully engaged in that discussion.

[Eric Deggans]

Frankly. Corey, it's a curve we're happy to be behind.

Our ownership structure has allowed us to make more careful cuts and provide as much material as possible to customers for as long as possible.

And I think we're still hoping to avoid drastic reductions. But a lot depends on the state's economy and elements beyond our control....

[Corey]

All newspapers are struggling financially due to the loss in adverstizing dollars, in part because of the prolonged real-estate/mortgage problems. Papers' revenue are down millions of dollars and operating costs continue to rise. You'll see lots of folks taking this buyout - and you will see layoffs after that. The Times is really behind the curve here as most papers nationally have been doing this for the past two years.

[Billy]

As a journalism school graduate, I have a great affinity for local newspapers. And I've lived in several cities, which has given me a chance to experience a variety of papers.

And for the life of me I can't figure out the St. Pete Times.
Compared to the Trib, the Times frequently has more real "journalistic" type stories. But the rest of the paper as a whole just seems flat. I'm not a Trib fan, but when I read both papers, the Trib seems more complete.
(I do live in Tampa and that may be partially the reason.)

Having said that, the trimming in size and staff of both papers is unfortunate. It is really noticable that stories aren't as long or in depth. It's all starting to look like USA Today. And that's a shame.

I do really enjoy the TBT concept, however. It's great read at lunch or on a break.

[former tampanian]

There's one problem with your suggestion JJ...MG has to answer to stock holders...Poynter is "non-profit" (that term is for discussion another day). One side would have to cross over to the perceived dark side. And Deggans would have to wipe the floor w/ ol' Walt.

[Jim Johnson]

The other Jim is right - Tampa Bay can not support two major daily newspapers for much longer. The problem is Media General -- as long as they can continue to hide behind the "convergence" where paper and TV staff can co-mingle, the Trib will be around.

IMHO, Media General should:
a) Sell the Trib to the Poynter Institute and then b) partner with Poynter for convergence.

Of course, that just isn't gonna happen this decade... but that would ensure a longer life for a daily newspaper in Tampa Bay.

Think XM-Sirius: they can not survive apart, so they might as well merge.

[Jim]

The Bay Area cannot support two major daily newspapers. I don't think it will come soon, but 25 years from now I think there will only be one left.

Frankly, the news from the "Times" keeps getting worse and worse. There's no way for Paul Tash to spin the recent changes to the newspaper as being in readers' best interests.

Who in their right mind believes that the tabloid trash the "Times" has published since 2006 is helping your bottom line??

[dreaming]

hmm...if i were a 'young person' observing how my employer today is treating people who are where i would be 20 years down the road, i would question my career choice ....

a business that habitually kicks to the curb its most experienced and competent in the name of cost-saving is not a good business. if journalism caught another industry doing that, there would be great indignant exposes....not to mention discrimination lawsuits

i dont believe many, if any, over 50s at the trib have opted for a buyout. with good reason. it makes no self-interested sense...

[Eric Deggans]

Looking at it the way a numbers cruncher would, the response to your idea would be that older workers earn more money. So to save the same amount, you'd have to lay off more young people.

And, because young people are the future of your staff, you'd also be risking the future of your workforce.

I think any sensible job reduction has to be focused as much on what people do as their age, tenure or pay level.

[dreaming]

oh how will paul tash ever get along on his frozen salary of $500k-plus, as reported recently by creative loafing?

guess he'll be switching to a budget version of brie and chablis...

meanwhile, who over 50 is going to take a 'buyout' in this economy? at that age, you cannot get a new ft job easily, so where do you get health insurance for 10-15 years until medicare kicks in? the layoffs should be among the 20-somethings who can catch on elsewhere, imho....