New York Times Co. (NYSE:NYT) Cuts 7.5% of Workers, Plans to Move Into Mobile

Today New York Times Co. (NYSE:NYT) announced its decision to cut jobs; these job cuts will include about 7.5% of newsroom posts. The reasons are multiple; first, new products are not meeting expectations and second, the revenue from print business is dwindling. The company shares saw a rise of 9%.

The company will remove 100 posts from its newsroom and relatively fewer posts from business and editorial operations. In a letter to all staff members, New York Times Co. (NYSE:NYT) said that it is willing to offer buyouts and if a sufficient number of employees do not volunteer to resign, then the company will have to lay them off.

Dean Baquet, the executive editor at New York Times Co. (NYSE:NYT), said that the company will discontinue their mobile application by the name of NYT Opinion as it failed to attract a satisfactory number of subscribers. He also declared that the company is looking forward to redesigning their magazine. They will introduce new features, such as First Draft and The Upshot, in their magazine so as to adapt to the now increasingly mobile world. First Draft is a section of the magazine that is dedicated to the fast-paced political world. Whereas, the Upshot offers data and analysis about: daily life, policies and politics.

Cutting jobs is not new for New York Times Co. (NYSE:NYT). Over the previous six years, the company has cut jobs several times in order to remain robust and efficient. In 2008 and 2009, the company eliminated 100 jobs each, and in 2013, the company said goodbye to 30 more people. And yet, the newsroom size is still extremely large – 1,330! This is the largest figure to be recorded yet. At the end of the previous year, the newsroom comprised 1,250 jobs. The addition of new jobs in the digital business accounts for the larger number now.

The company has made plans to invest in the following areas in the next few months:

Advertising
Mobile
Digital products
Audience development
And some targeted areas in the print business

The advertising revenue from the digital business is likely to see a rise of about 16% in the third quarter of the current fiscal. This will be driven by videos and smartphones. Yet, the graph of overall revenue will remain flat. In the second quarter, the overall revenue of the company declined because advertising revenue from printing business fell. In July New York Times Co. (NYSE:NYT) said that they are expecting their print advertising revenue to decline even more. The business of print advertisement is very volatile, and this is a well-known fact. This is exactly what happened to the company in the third quarter according to New York Times Co. (NYSE:NYT).

The company’s shares met an increase of 8.1% in the morning trade on New York Stock Exchange. The shares were priced at $12.13. Up till the closing price of the company stock on Tuesday, New York Times Co. (NYSE:NYT) had seen a decline of 30% in stocks this year.