May 3, 2022 - Economy

Scoop: Huge layoffs expected at Lee Enterprises

Illustration of a crumbling newspaper

Illustration: Annelise Capossela/Axios

Lee Enterprises has been quietly laying off dozens of employees across its local papers and at the corporate level as it continues to cut costs following the unsolicited takeover bid from hedge fund Alden Global Capital, sources tell Axios.

Why it matters: Lee is one of the last remaining independent local newspaper companies. With these drastic and ongoing cuts, journalists are left to wonder whether a hedge fund takeover could have been better than staying independent.

By the numbers: One source said more than 400 roles are expected to be cut in total this year across at least 19 Lee-owned local papers and corporate functions.

  • The cuts could represent as much as 10% of Lee's total staff being reduced. On September 26, 2021, Lee said it had approximately 4,793 full-time equivalent employees, 805 in unions.
  • Lee owns and operates around 75 daily newspapers and nearly 350 weekly and specialty publications across 77 markets in 26 states. Lee acquired Berkshire Hathaway's newspaper operations for $140 million in early 2020.

A spokesperson for Lee didn't deny the cuts in response to an email asking about the scale.

  • "As Lee Enterprises continues to transition from a print-centric to a digital-first business, we need to make job reductions to better align staffing with our long-term strategy," they said in an email to Axios.
  • "These reductions are specifically tied to our legacy print business and in areas where we can become more efficient through business transformation,” the spokesperson said.

Be smart: The spokesperson added that there are "no layoffs of reporters or photographers at this time," but as Axios has reported, editors and other editorial staffers haven't been immune to cuts.

Details: Lee began laying off dozens of employees in the past two weeks affecting publishers, human resources professionals, IT professionals and people in print production and advertising, multiple sources familiar with the cuts tell Axios.

  • Sources say there were still pink slips being delivered as recently as Friday.
  • Employees and ex-employees describe the situation as "dark." Sources describe scenarios where they are laid off, only to have their same role re-posted online for less money.
  • Attrition is also playing a role in reductions.

"The frustration for me as an employee is that they don't announce the cuts. They make management explain what's left behind," Katherine Knott, the unit chair for the Blue Ridge NewsGuild, told Axios.

  • The Blue Ridge NewsGuild has been tracking positions lost among the 12 unionized Lee newsrooms since Lee's March 10th shareholders meeting. Thus far, roughly 61 roles have been eliminated across 10 newsrooms that have reported losses, mostly through layoffs and buyouts and some via attrition.
  • Many of the roles that have been cut across those unionized newsrooms have been non-union employees. Many are middle managers.

Zoom out: In the month since Axios reported about quiet Lee layoffs that affected at least eight staffers — many of them top editors — across five newsrooms, at least a dozen more newsroom jobs have been cut or have been revealed to be cut.

  • The Eagle in Bryan, Texas laid off its editor and consolidated the position with its sister paper, the Waco Tribune-Herald.
  • The Omaha World-Herald editorial page editor was reportedly cut and the editor of said they were taking a buyout.
  • A North Iowa editor said she was laid off in February.
  • The Daily Progress in Charlottesville had a photo editor cut, its union tweeted.
  • The Richmond Times-Dispatch laid off three editors in mid-April following cuts at the paper in February.
  • The Bismarck Tribune lost its publisher last week, a source tells Axios. His name was scrubbed from the paper's masthead.

What they're saying: A Twitter account representing the unions of Lee Enterprises noted "dozens of Lee Enterprises employees," non-union and union, have left the newspaper chain so far this year."

  • "Some were forced to go. We urge Lee to adopt a better business model," it said.
  • The account also noted that Axios' previous story about incremental Lee layoffs "is an undercount."
  • Lee had declined to comment to Axios for the story last month.

The big picture: The latest wave of April cuts comes ahead of Lee's quarterly earnings report on May 5th.

  • Flashback: Alden presented a hostile takeover bid for Lee in November. Lee quickly enacted a "poison pill," to stave off the fight.
Lee Enterprises stock price
Axios Visuals.

The bottom line: "Glad to be gone. This company is cutting off its nose to spite its face," a former employee said.

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