Sun-Times to take $8 million 4Q charge
EmptyCHICAGO -- Sun-Times Media Group Inc., parent company of the Chicago Sun-Times, said Tuesday it plans to take a fourth-quarter charge of $8 million before taxes for severance costs from previously announced job cuts at its newspapers and other actions.
Chief Executive Cyrus Freidheim said the company has made significant progress toward its goal, announced last month, of reducing annual operating costs by $50 million in the first half of 2008.
He called the cutbacks regrettable but necessary for long-term viability and voiced a commitment to the ailing Sun-Times, which he said the company intends to keep operating "for years to come."
"These reductions come during a tough period for the news industry, but we firmly believe that resizing the organization and continuing to invest in growth areas, such as online media, are key to creating shareholder value," Freidheim said in a statement.
Sun-Times Media said it expects a significant portion of the targeted savings to be achieved through head count reduction, including jobs in the advertising, circulation, distribution, editorial, executive, information technology, marketing and production departments.
It said some of the $50 million in savings will come from job reductions taken last year, including its distribution agreement with the rival Chicago Tribune and the combination of two of its suburban newspapers. It also recently outsourced its truck fleet maintenance operations.
Other cutbacks include reducing page sizes, cutting the amount of news in its newspapers in comparison to advertising space, and eliminating unprofitable suburban weeklies.
Like other U.S. dailies, the Sun-Times has been losing advertisers and subscribers in huge numbers to the Internet.
Key investors have said the ailing media company needs to clear up its financial situation and tax status before being able to put itself up for sale.
Sun-Times Media shares fell 8 cents, or 5%, to $1.52 Tuesday. They have traded in a range between 85 cents and $6.94 over the past year.