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Cuts to run deep at N&O

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Just as Executive Editor John Drescher was about to address The News & Observer's newsroom Wednesday, he found an Associated Press wire story someone had left for him to see. It was about a Brazilian engineer who was attacked by machete-wielding Amazon Indians during a public meeting about a hydroelectric dam.

A note attached to the story said, "Don't fear the standup! It could be worse." The standup is the weekly staff meeting, and it was no secret ahead of time that Drescher had bad news.

At the end of last month, The N&O announced it would offer buyouts to some of its 762 full-time employees as part of a strategy to cut the newspaper's expenses. McClatchy, The N&O's parent company, is facing intense financial pressure. (See "Possible layoffs loom at The N&O.")

Of the newsroom's approximately 200 employees, just a few editors and research staff were offered buyouts, and only three to five were expected to take the offers.

On Wednesday, Drescher announced the names of the six editorial staffers who had accepted. But those who attended the meeting say the worse news was, that won't be enough.

"I feel sadness right now," Drescher said Thursday. "We're losing some people who've done really good work for a long time and are part of the fabric of the place. And we're losing some people who are in the early part of their careers, who I had envisioned down the road as some of the key leaders of this newspaper. It's really hard to say goodbye."

Five editors accepted The N&O's buyout offers: growth editor Kathy Williams; assistant business editor Tom Burton; in features, Sunday editor Suzanne Brown and food editor Amber Nimocks; and Wake County education and community editor Dan Holly. Arthur Watkins, an archive enhancer in the news research department, also accepted the offer. Their last day of work is Friday, May 23.

The N&O is actually doing better than most newspapers. It turned a profit last year, and its combined print and online readership is increasing.

But McClatchy's Sacramento headquarters dictates certain revenue requirements to its 30 dailies. And McClatchy's 2006 purchase of the Knight Ridder newspaper chain for $4.5 billion saddled the company with enormous debt. The banks that hold the debt could call it in if McClatchy's debt-to-earning ratio gets too high. The company is aggressively trying to shrink the $2.4 billion it owed as of the end of April. On Thursday, the company announced it had bought back $300 million in bonds.

Several other McClatchy papers, including The Charlotte Observer and the flagship Sacramento Bee, have offered their employees buyouts recently. McClatchy is hardly alone, either. The Washington Post announced this week that 100 newsroom staffers had accepted buyouts, including Pulitzer Prize-winning political writer David Broder.

No one knows for sure how many jobs will ultimately be on the chopping block in Raleigh, or if cuts will come in the form of additional buyouts or as layoffs. Drescher wouldn't comment on possible future job cuts, and publisher Orage Quarles could not be reached for comment. But sources inside the paper expect the coming changes in the newsroom to be the most profound in the newspaper's history.

They also say Drescher is handling them about as well as anyone can. "I give him an A-plus for his transparency about all this," said investigative reporter Joe Neff. "This is the most difficult thing an editor could face. At all these meetings, he stands up and takes questions and answers them, and if he can't answer a question, he'll tell you why."

The newsroom has lost other key staff recently through attrition. Photo editor Robert Miller left in early May to take a job with The Washington Post. Health care reporter Jean Fisher also left recently to take another job. After veteran down-east reporter Jerry Allegood retired this month, the doors to the paper's Greenville bureau closed for good. "It was very painful to close that operation," Drescher said. "There are a lot of great stories in eastern North Carolina."

Salaries and newsprint are any newspaper's biggest expenses. So further cuts are likely to come through consolidating the various sections. The daily business section, for instance, might be folded into City & State, a move that would allow the entire paper to be printed in one press run, saving time and money.

There's also the possibility of saving on office space. The N&O owns its Chapel Hill office on Franklin Street and, while it leases space in Brightleaf Square in Durham, both have plenty of extra room. Drescher said he's open to the possibility of leasing out some of the Franklin Street space, and that a deal is close to signing a lease on a smaller space in Durham. He said he hasn't ruled out the possibility of consolidating the two offices, "but we really feel there's a benefit to having a physical presence in both communities."

Whatever cuts may be necessary, Drescher said he's eager to focus on the future, and that means the Web. "It's time to get back to the work at hand and keep focused on the journalism and recognize there's a lot of change coming our way. I told the staff yesterday, among other things, we have really got to do better on the Internet. We've made a lot of progress, but it remains a pretty small percentage of the staff who contributes frequently. The best way to drive traffic is to add a lot of good, fresh content, and we need more of our staff creating that."

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