San
Jose Mercury News publisher Jay
Harris' belt-tightening memo
Sent:
Monday, March 05, 2001 1:00 PM
To: ALL
Subject: Update on the Budget Situation
TO: All Mercury News Employees
This
is a letter I have worked very hard not to have to write to
you. It is a letter that brings news you will not be pleased
to receive. But the information that follows reflects reality
and, as always, I want to make sure you know what's ahead.
As
you all know from reading the paper and my recent e-mails
to employees, the national economy generally - and local high
tech companies in particular - are in decline. This continuing
decline has had a significant impact on our business.
Most
problematic is the reduction we've seen in recruitment advertising.
With fewer and fewer Valley companies hiring, and more and
more announcing hiring freezes or layoffs, we are experiencing
a sharp drop in recruitment advertising.
To
understand the speed and size of the decline, consider this:
In
January, our recruitment revenue fell $103,000 short of the
same month last year. In February, recruitment revenue fell
about $2.5 million below the same month last year.
In
order to reduce expenses enough to offset as much as possible
the decline in revenue, we will be eliminating functions and
restructuring to increase efficiency. Virtually everything
that we do will be evaluated in that light.
Restructuring
and reorganization will be difficult and disruptive. But,
we have grown quickly and dramatically over most of the last
six years as the Silicon Valley economy boomed. No doubt,
some measure of inefficiency accompanied that rapid growth.
So it makes sense to ensure that in this time of contraction
our resources and staff are concentrated in the highest priority
areas. Inevitably, we will also have to make that are not
inefficient but are, nevertheless, of lower priority than
other things we do.
We
will also reduce the number of people we employ. We are now
considering offering an early retirement program. If we decide
to implement an early retirement plan, we will announce it
in the near future. But given the severity and rapidity of
the decline in our revenue, and the likelihood it will continue,
I have concluded, with regret, that we will be unable to achieve
the level of expense reduction we are seeking to achieve without
layoffs.
At
this point I do not know either the number of layoffs that
will be required or the departments in which they will occur.
We will conduct a careful examination of every department
and every position. We will review with each division head
the impact of various levels of layoffs in every department.
Of necessity, decisions on these matters will be made quickly
- but with as much care and sensitivity as possible.
Today,
we will begin a complete re-budgeting process that should
be completed in two to three weeks. We will determine how
much can be counted on from the cuts and savings measures
I've outlined for you in my earlier e-mails, including measures
we are currently discussing with union leaders. We will determine
what can be saved through restructuring and additional operating
expense reductions. Once we know the savings that will result
from those efforts, we will know how far we have still to
go. That will determine the number of layoffs.
There
is no way to minimize the pain that layoffs will bring - mostly
for those who will lose their jobs, but also for those who
do not, but who will have to deal with the hurt of friends
and colleagues losing their jobs.
It
is in tough times that the commitment of an organization to
its core values is put to the test. This year, and the next
few weeks in particular, will be a testing time for the Mercury
News. Making the tough and, at times, painful decisions will
be only the first step in that testing. Our challenge in the
weeks and months that follow will be staying true to our values
and focused on our priorities.
I wish
I had better news for you today. Sadly, I do not.
The
next few weeks will be stressful and I'm sure many of you
will have questions. Do not hesitate to contact me directly,
or to talk to the head of your division, your manager or supervisor,
or leaders in the Human Resources division to get answers
to your questions or help with situations you may face.
As
always, I will be in touch again when I have more I can tell
you.
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