Tribune Publishing is cutting costs in a major way as it approves buyouts for 7% of 7,000 eligible employees.
According to the Chicago Tribune, the voluntary separation plan will provide employees who have been there for up to a decade with one week of pay for each year of employment. It will increase to two weeks for those employed at the company for 11 to 20 years, and three weeks for people who have been there for 21 years or more. The payouts, which will be distributed through the first half of 2018, will cap at one year’s salary.
Tribune Publishing is the owner of 11 major newspapers, including the Chicago Tribune, the Los Angeles Times, and the San Diego Union-Tribune which the company bought in May for $85 million.
Tribune will record a fourth-quarter charge of an estimated $47 million related to the buyouts. In its entirety, the separation plan is expected to cost approximately $55 million in severance, benefits, and taxes.
This cost-cutting measure comes as the entire newspaper industry has been facing revenue declines. Tribune’s stock has seen an especially rough couple of months following a controversial leadership change at the LA Times.
The company reported losses of $8.6 million, or 33 cents per share, in the third quarter. This number reflects a $7.3 million jury award to a former LA Times sports columnist who had sued Tribune for age discrimination. Tribune plans to appeal the lawsuit. If it does, third quarter losses would be reduced to $3.4 million, or 13 cents per share.