January 15, 2009 / 7:09 PM / 11 years ago

UPDATE 1-Boston Globe offers buyouts, layoffs possible

NEW YORK, Jan 15 (Reuters) - The Boston Globe will cut 12 percent of its newsroom staff through buyouts and possibly layoffs, the latest sign of how an advertising downturn is corroding the fortunes of U.S. newspapers.

The Globe, which is owned by the New York Times Co (NYT.N), is offering buyouts to all of its newsroom staff in an effort to cut up to 50 full-time employees, Editor Martin Baron told workers in a memo posted on the paper’s Boston.com website on Thursday.

“While we hope to reach the goal through voluntary departures, we will resort to layoffs,” Baron wrote. This would apply to both union and non-union workers, he added.

A Globe spokesman was not immediately available for comment.

The paper’s news staff has shrunk over the years as advertising revenue has tanked in the Boston area. The paper now has 379 full-time employees, and 433 full-time equivalent positions, New York Times Co spokeswoman Catherine Mathis said.

Media reports have said that the Times may try to sell the Globe to drum up cash to pay off debt. As recently as two years ago, the newspaper was considered to be worth more than $500 million. The Times bought it in 1993 for $1.1 billion.

A Barclays report that came out late last year said its value has fallen to as low as $20 million. Other newspapers currently on the market, such as the Seattle Post-Intelligencer, are having trouble finding buyers and could shut down instead.

The company also is fielding interest in its 17.5 percent stake in New England Sports Ventures, owner of the Boston Red Sox baseball team, a source familiar with the matter previously told Reuters.

It is unclear whether the Times would try to sell the Globe and the Red Sox together or separately. The company also owns another local paper in Massachusetts, the Worcester Telegram & Gazette.

The Times has declined to comment on whether it is trying to sell the Globe, but a source familiar with the matter previously told Reuters that it has received at least one offer to buy it.

The Globe is the 14th largest newspaper in the United States, with an average weekday circulation of nearly 324,000, according to figures compiled by the U.S. Audit Bureau of Circulations. Its Sunday circulation is nearly 504,000.

Those figures are down about 30 percent from 2000, according to The New York Times.

In its New England Media Group, home to the Globe and Telegram & Gazette, advertising revenue fell 23.3 percent in November.

Other publishers have resorted to buyouts or layoffs in the past 12 months, including The New York Times, The Washington Post Co WPO.N and Miami Herald publisher McClatchy Co (MNI.N).

USA Today Publisher Gannett Co Inc (GCI.N) said on Wednesday that it is forcing employees to take a one-week furlough during the first quarter to avoid more layoffs.

New York Times shares fell 30 cents, or 4.79 percent, to $5.96 on the New York Stock Exchange. (Editing by Derek Caney)

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