Anonymous newsroom sources say that layoffs could be concentrated in advertising and U-T TV
U-T San Diego’s recent spending slashes have employees worried about possible layoffs — perhaps as early as this week.
Three management moves have generated the rumors: (1) The company told employees that it is ending its 401(k) match — that is, the company will no longer add 50 percent to a 401(k) contribution up to 6 percent of one's salary. The move was effective January 1; (2) For several months, the company told employees to take all their vacation before the end of 2013. Such a move often suggests an effort to clear the books by year’s end; (3) Effective January 1, the U-T abruptly ended its U-T Rewards program, through which consumers could get discounts on products from certain advertisers. In its announcement, the U-T stated, "Any outstanding rewards that you have will no longer be eligible for redemption."
Newsroom employees believe the layoffs could be concentrated in advertising and U-T TV, which they estimate is losing $400,000 to $500,000 a month. They note that the 401(k) memo from chief executive John Lynch stated, with unusual candor, "The media business continues to face the challenges of a difficult economic recovery." Lynch blamed the move partly on the expenses of Obamacare.
In short, the happy face management formerly flashed when it claimed it was profitable seems no longer in evidence. Some employees, noting that the dropping of the 401(k) match is essentially a pay cut, are likely to stop contributing to the company's 401(k) program and find an individual retirement account (IRA) outside the U-T.
There is even some speculative talk that the company or parts of it will be put up for sale, or the whole operation could be terminated so owner Doug Manchester could pursue his real estate plans with the land he bought when he purchased the paper. He has already filed for entitlements on some of the property.
I emailed Lynch yesterday, January 5, and said I wanted a response by noon today. I have received none. He did not reply to the last email I sent him, either.