"All The News That's Fit to Print" is going to have to be published with a little less manpower now that The New York Times (NYSE:NYT) is laying off approximately 4% of its staff starting next month. Letting go of approximately 500 employees won't be easy, especially since the company already laid off 200 workers earlier this year.
The announcement comes a day after the company launched its Times Select premium service, charging online readers for some of the digital content that it used to provide for free.
Laying off some of its staff at the same time it begins charging for online content is certainly a bold combination. It has to now communicate the value in paying for what was once free, despite reductions in the newsroom. Even though the company's premium columnists are unlikely to go anywhere, it's a battle against public perception.
Yesterday, the company also announced that advertising fell for the month of August at its traditional newspapers and has been "challenging" so far in September. However, the Times' online presence was posting double-digit gains in advertising. That may lead one to wonder why the company feels the need to launch Times Select while being rewarded by sponsors for growing its online traffic.
Times are tight in the print world. Rivals Knight Ridder (NYSE:KRI) and Gannett (NYSE:GCI) both warned of sluggish ad sales in their newspaper business earlier this month. Yes, current numbers are being stacked up against the ad-heavy 2004 season, with the Olympics and the presidential election padding results, but that doesn't explain why the online format is thriving.
The migration continues. Companies like Google (NASDAQ:GOOG) and Yahoo! (NASDAQ:YHOO) are providing a more compelling product for advertisers, letting sponsors receive interested leads online for just pennies a click. Results can be tracked immediately, making marketing budgets fully accountable.
That's why The New York Times acquired About.com earlier this year. It's why The Washington Post (NYSE:WPO) bought Slate. There is money to be made in the virtual world. Let's hope that the layoffs don't cloud these companies' focus on the areas where they're growing fastest.
Longtime Fool contributor Rick Munarriz still enjoys reading the paper in the morning, but finds it obsolete once breakfast is over. He does not own shares in any of the companies mentioned in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.
