Posted on 01/31/2008 9:43:06 AM PST by abb
The Charlotte Observer said Wednesday it will cut 25 of 41 jobs in its ad design group as it sends the work abroad, joining other large companies using foreign outsourcing to trim costs.
The newspaper has been testing outsourcing options for the work since last summer and chose Affinity Express, an Illinois company with facilities in the Philippines and India.
Employees, who have known layoffs were coming, received official notice Wednesday. They can apply for the 16 remaining jobs as artists, designers and "traffic coordinators" working with their overseas counterparts to complete ads, said Observer Publisher Ann Caulkins. Some people also may take positions elsewhere at the paper, which has about 1,000 workers.
Caulkins called the job-cutting discussions "brutal."
"It's a hard conversation to have," she said.
The deal is expected to save 35 to 40 percent on labor for the work, Caulkins said. She wouldn't give a specific figure. The paper also gains access to more sophisticated technology without the need for investment. The transition is expected to be complete by May 31.
Workers losing jobs will receive severance packages based on years of service.
Affinity, one of three companies tested, has been providing similar services for a sister paper, The State in Columbia, since November, Caulkins said. Observer management was able to visit and see firsthand how the system worked.
"We had to be convinced the service would be superior," Caulkins said. "We would not have done this if we thought it would affect customers one bit."
Customers will work only with Observer employees, not Affinity personnel, she said. Some companies that outsource have had complaints from customers, who objected to dealing with workers overseas.
The Observer, like newspapers nationwide, has struggled for years with declining circulation. Last year, the industry's auditors began measuring the reach of newspapers through readership and their quickly growing Web sites. Readership rates take into account that newspapers are passed around, read by several people in offices, restaurants and elsewhere.
Publishers use those figures to set rates and sell ads.
The Observer's Web site, Charlotte.com, which has been a big help in building readership, has seen its audience grow 25 to 30 percent a year for several years, Caulkins said.
"Online and magazine revenues have grown significantly ... making up a sizeable portion of our present annual revenues," she said.
But that growth hasn't been enough to offset losses in the print version. That's left papers looking to cut costs.
A major newspaper trend
Banks and other financial institutions have been leaders in the outsourcing movement. Newspapers were slower to embrace the concept, but that's changing. The Newspaper Association of America said outsourcing would be one of eight major trends in the industry this year as publishers seek to cut costs, improve service and preserve money for other investments.
The News & Observer in Raleigh said this month that it also will be using Affinity for the same ad service as the Charlotte newspaper. Both papers, and The State, are owned by The McClatchy Co., based in Sacramento, Calif.
Caulkins said McClatchy "strongly encouraged" the outsourcing but didn't mandate it.
"As we are looking for more efficient ways to do our business, this was one thing we were encouraged to explore," she said.
McClatchy owns seven daily papers in the Carolinas. Outsourcing ad work may not make sense for smaller papers with fewer workers. Caulkins said the paper is not considering outsourcing newsroom jobs, such as copy editing and design work.
"We trust the people," she said. "We like having it here. To outsource that ... we're just not going there."
ping
McClatchy is doing this in CA. Part of the same trend?
Precisely. I give McClatchy (MNI) no more than three years to stay in business. They’re dead men walking.
The Charlotte Observer really is the worst of the worst (i.e. they $UCK). But hey, they outlived their boy Edwards’s campaign.
So someone like Zell might come over and buy their assets in a fire sale? At some point the whole heap has to come crashing down, though.
I know about the schaudenfreude etc., but deep down this whole process and series of failures is really painful. I used to love to read the newspapers. It’s horrible what the liberals have done to them. I even have letters written by my ggg-grandmother, asking my gg-grandfather what newspaper he read. It’s a terrible shame what they have allowed themselves to become.
I understand your sadness. I too grew up reading newspapers. The once conservative Shreveport (LA) Journal, The Monroe (LA) Morning World - before it was infected with Gannett Syndrome, and others. All gone now.
But then look at this way. Think of all the scribblers put out of work when movable type was invented. When they went away I’m sure they were missed for a while, but knowledge became more widespread. The same will be said of newspapers in the future. They will be remembered as a quaint anachronism like the coal oil lamp, the horse-drawn wagon and suchlike.
Yep, you are right. I hope conservatives can start new ventures that rival or surpass the old “gray ladies” that are fading away.
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You can go to any of dozens of graphic artists online forums and find tens of thousands of graphic artists who have talent that blows away anything seen in American newspaper advertising design departments. And most of the artists online are kids in high school and college. Deviantart, turbosquid, gfxartist.com, etc.
You then have thousands of semi-pros and professionals who have online galleries for their portfolios, all hungry for freelance work and listed on the hundreds of freelance graphic design job search websites..
But guess what, all of the New Age Graphic Designers are going to sell their skills to an empty market. American business will seek their New Age Graphic Designers overseas where they can get design talent at a fraction of the cost.
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