Washington Post Cuts Costs

The Washington Post Company (WPO), a diversified education and media company, recently announced that it would close its bureau offices in New York , Los Angeles and Chicago effective Dec 31, 2009, in an effort to cut costs and focus more on local news.

Consequently, three news aides will lose their jobs, but six affected reporters in those bureaus have been offered jobs in Washington.

The newspaper industry has been reeling under the economic crisis. Publishing companies have been experiencing plunging advertising revenue. To survive, the companies are trying to cut costs by trimming headcounts, closing printing plants and so on, whereas others who could not withstand the headwinds went out of business.

In an attempt to cut costs, The Washington Post offered Voluntary Retirement Incentive Program. Recently, 221 employees at The Washington Post newspaper and 44 employees at the Newsweek magazine accepted the offer.

In third-quarter 2009, Newspaper Publishing division revenue tumbled 20% driven by a 28% fall in print advertising revenue at The Post and 18% decline in online revenue, primarily from washingtonpost.com, whereas Magazine Publishing division revenue fell 33% driven by a 48% drop in advertising revenue at Newsweek.

Like Washington Post Company, other newspaper companies – The New York Times (NYT), Journal Communications Inc. (JRN), Gannet Co., Inc. (GCI) and The McClatchy Company (MNI) – have been grappling with the slump in print advertising demand amid the global meltdown, as advertisers are migrating to the Internet driven by increasing online readership and lower ad prices than print.

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