Wednesday, December 04, 2013

One community newspaper chain drops health insurance coverage; another cuts weekly hours

Anyone who has worked at a newspaper in recent years knows that lay-offs, furloughs and budget restraints are nothing out of the ordinary. Still, it's a shock to the system any time a well-regarded news organization cinches the belt straps a little tighter, with employees taking the brunt of the costs. Western Communications, which owns six community newspapers in Oregon and two in California, announced last week it will no longer provide health insurance to its 280 employees, citing rising costs for the decision, Jim Romenesko reports. He also reports that Shaw Media, which publishes about 100 print and digital publications in Illinois and Iowa, is cutting the workweek for all employees from 40 to 37.5 hours.

Western Communications president Gordon Black told Romenesko: "The alternative is a hell of a lot of bodies” being laid off, “and we’ve tried to maintain the workforce. We believe if we don’t create the content, we start the death spiral.”

Western, which emerged from bankruptcy protection last year, cut 10 percent of its staff in 2012, David Nogueras reports for Oregon Public Broadcasting. "Throughout the entire recession, the company managed to avoid making layoffs. Ironically, the high foreclosure rate had something to do with that. Papers like the Bulletin made a lot of money from the legal notices required by Oregon’s non-judicial foreclosure process. But in an article posted on the Bend Bulletin’s website, publisher Gordon Black says that money has suddenly all but disappeared."

"Black says the company keeps an insurance policy in the event an employee’s claims exceed $100,000 in a year. But he says the company remains financially exposed if numerous employees get sick simultaneously," Nogueras writes. "Black says while recently enacted provisions of the Affordable Care Act didn’t directly drive the decision, he says the company would have been forced to drop its coverage in 2015, the year the employer mandate goes into effect." (Read more)

Shaw Media will begin the 37.5-hour workweek Jan. 1. President John Rung said in a memo to employees: “The company continues to battle a challenging revenue environment, and we face increased costs in health care. The standardization of the workweek will provide a temporary reduction in expenses as we strive to improve our financial performance. This move will also allow us to save jobs across the company while continuing to find ways to better serve our customers. It is our intention to adjust wages as our performance improves.” (Read more)

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