Journalism job cuts: Philly Inquirer plans buyouts to reduce newsroom staff

Despite a unique ownership structure that’s been touted as a hopeful alternative to the hedge-fund gutting of newspapers across the nation, the Philly region’s largest newsroom is about to get smaller.

The publisher of the The Philadelphia Inquirer, Philadelphia Daily News and Philly.com on Thursday offered buyouts to staff in what it said was an effort to streamline finances and rein in costs.

If not enough employees take voluntary buyouts, layoffs may be on the table — “but we’re not at that point yet,” a spokesperson told Billy Penn on behalf of publisher Terry Egger.

The move prompted an incensed response from the NewsGuild of Greater Philadelphia, which had previously expressed a vote of no confidence in Egger.

“We have been told again and again by Publisher Egger that we’re different than the rest. Remember when he recently stood before you and noted that reductions in force were happening to all those OTHER media news companies?” the union asked in a letter to its members.

The buyouts — officially referred to as a “Voluntary Separation Program” — will be offered to 140 employees across the editorial, finance, advertising and IT departments of parent company Philadelphia Media Network. Eligible employees include both union and non-union staff, as well as management.

It’s not entirely clear how many jobs will be cut.

Though the Guild’s letter to its members sounded the alarm about a coming workforce reduction of 10%, the publisher disputed that, saying, “It will not be anywhere close to…10%.”

In total, PMN employs more than 1,000 people, it said. In a previous round of buyouts in 2017, about 50 newsroom staffers chose to take the severance package. Since then, “about 45 journalists” have been hired, to “profound impact,” a spokesperson said.

NewsGuild Executive Director Bill Ross told the Philadelphia Business Journal he believed management was looking for at least 30 union members to take the buyout.

Newspapers have been rapidly shrinking across the country. Between 2008 and 2017, newsroom employment dropped by 45 percent, according to a Pew Research study released last year. Jobs in public relations now outnumber those in journalism by a ratio of 6-to-1.

As the industry has grappled with huge losses in advertising revenue, hedge funds have bought local papers and slashed jobs amid consolidation.

The Inquirer is not quite in the same boat, however, thanks to former owner H.F. “Gerry” Lenfest. Before his death in 2018, the philanthropist donated the business to a new nonprofit institute dedicated to supporting local journalism. Now known as the Lenfest Institute, it oversees and provides support to the for-profit company that owns The Inquirer and its sister brands.

“There’s reason for great optimism that the business of local news can be reinvented, especially here in Philadelphia, where the First Amendment was penned,” Lenfest Institute CEO Jim Friedlich wrote in an op-ed this spring. “The newspaper is neither out of the woods financially nor ready to declare victory, but we believe we have put in place the building blocks of a sustainable local news operation.”

In his Thursday letter to staff, publisher Egger said the company’s unique ownership structure did not preclude it from feeling the same financial crunch as other newspapers: “That does not make us immune to the dramatic economic challenges that weigh heavily on the news industry.”

With print subscriptions dwindling and online advertising revenue being sucked up by giants like Facebook and Google, media companies have turned to paywall and membership models to try to become profitable online. One after another, hundreds of local print newspapers have shut down over the past decade..

“It’s the end of a form of communication — akin to the railroads losing out to air travel, or vaudeville being supplanted by film,” said Chris Krewson, the executive director of Local Independent Online News Publishers, a trade organization. “It’s capitalism, baby.” (Krewson is a former employee of both Philly.com and Billy Penn.)

The Lenfest Institute itself was not involved in any operational decisions made at The Inquirer, but the nonprofit’s board understands why the buyout plan is necessary, according to Chairman David Boardman.

“We are focused on helping them acquire the tools, talent and resources they will need in order to serve this community with quality journalism for decades to come,” he said.

“Given that, the decision to make some reductions in staff in order to continue transforming into a healthy, digitally focused company makes sense, as painful as it undoubtedly will be,” Boardman continued. “It’s a challenging time for all media companies, and even one run for the benefit of the public instead of profit-seeking shareholders is not immune from the realities of the marketplace.”

Leaders of the NewsGuild don’t see it that way.

“This goes far beyond sad,” Guild President Diane Mastrull wrote to members. “It’s sickening and disgraceful.”