Buffett's Buffalo News offers buyouts
SAN FRANCISCO, Aug 19 (Reuters) - Insurance isn't the only thing weighing on Warren Buffett's Berkshire Hathaway Inc (BRKa.N)(BRKb.N) lately. His daily newspaper is cutting jobs.
The Buffalo News is offering buyouts to about 10 percent of its workforce, or 107 employees, as the upstate New York newspaper copes with a decline in advertising revenue that is forcing newspapers across the United States to slash jobs.
Newsroom and outside advertising representatives will not be affected, the paper said on its website on Tuesday.
"Like all other news organizations, our business is under financial duress," Dottie Gallagher-Cohen, senior vice president of marketing, said in the article. "We are trying to reduce expenses in the least painful way possible."
The paper expects fewer than 107 people to accept the buyout, and no action will be taken beyond that if eligible employees turn it down, the paper reported.
The amount of money varies, but the baseline offer is $60,000, the paper reported.
The Buffalo News is a comparatively small part of Berkshire, which generates about half its business from insurance. Berkshire's second-quarter profit fell 8 percent.
With the buyouts, the paper joins a long list of other U.S. publishers from Gannett Co Inc (GCI.N) to the New York Times (NYT.N) offering buyouts or laying off workers as they try to trim expenses to cope with deteriorating ad revenue.
Ad sales are falling as more people get their news for free on the Internet instead of from print newspapers. Wider economic troubles, from the credit crunch to plunging U.S. housing prices, are exacerbating that more fundamental shift.
Buffett, who also is a member of The Washington Post Co's (WPO.N) board, warned "aspiring press lords" in his 2007 letter to Berkshire shareholders that anyone buying newspapers should be ready for a bumpy ride.
"There's no rule that says a newspaper's revenues can't fall below its expenses and that losses can't mushroom," he wrote at the time. "Fixed costs are high in the newspaper business, and that's bad news when unit volume heads south."
(Reporting by Robert MacMillan; Editing by Phil Berlowitz)
