Friday, July 11, 2008

Death spiral memo

Sent: Friday, July 11, 2008 4:40 PM
To: OSC DL Management Update
Subject: A Message from Chief Financial Officer Robyn Motley

Management Team,

As you know, advertising revenue has declined significantly year over year. In addition, substantially higher newsprint prices and fuel costs have negatively impacted our operating cash flow.

Teams across the company have responded by implementing both revenue and cost containment initiatives and we applaud their efforts, which have helped stem the tide. However, the advertising outlook for the balance of the year remains challenging, and we don’t see newsprint or fuel prices reversing any time soon. Therefore, effective immediately, we are calling on each of you to significantly reduce, and eliminate where possible, all discretionary spending, defined as that which does not generate revenue or impact our ability to publish or deliver our products.

The list of discretionary expenses outlined below is by no means all-inclusive. Please review all expenses and use your best judgment about which line items, in addition to these, can be reduced or eliminated. While you may consider some of these reductions to be relatively insignificant, collectively they will add up to substantial savings. It is also essential everyone uses the same good judgment. So, we would ask managers and supervisors to communicate the same expectation to their staff, especially those who hold PCards and AMEX cards.

While these more stringent cost containment efforts are to begin immediately, over the next few weeks, each Director will work with his/her staff and budget analyst to project potential savings for the balance of the year.

Cost Containment Initiatives:

· Reduce total labor expense, defined as the total of regular pay, overtime, temp help, freelance and contractor expense.
· Significantly reduce or eliminate employee/employee entertainment. Reduce or eliminate all other entertainment except customer entertainment.
· Reduce business travel and mileage expense except for customer visits and editorial coverage.
· Reduce conference fees and the related travel expense by sending fewer people.
· Eliminate business gifts except for those pre-approved by division VP.
· Eliminate company events, except employee recognition meetings/events.
· Significantly reduce or eliminate food and beverage at employee-only meetings.
· Reduce dues and subscriptions.
· Flower arrangements should not be budgeted, but absorbed in the budget, if warranted.
· Reduce outside training, opting instead for in-house training or training the trainer.
· All company memberships must be approved by the CFO before renewal.
· Review cell phone/PDA expense to ensure that charges are correct and that company issued devices are still warranted for all employees listed.
· Consolidate and reduce office supplies proportionate to recent FTE reductions.
· Any expense that is eligible must be capitalized, and all capital must be approved by the CEO.
· Above all, challenge the status quo by assessing the business benefit of all expenditures. Spend only what is necessary, not necessarily what’s in your budget.

Our management team has a long history of quickly responding to challenges such as the one we currently face, and I have every confidence that we will again meet this challenge. Thank you in advance for your help and please do not hesitate to contact Doug Vance or me if you have any questions or require additional clarification


Maria Padilla said...

This is like an alligator's death roll: It traps you between its jaws and rolls and rolls till you drown.

Portd032 said...

The pity is that Sentinel management is going to waste time trying to figure out how I got this memo.

Instead they should be figuring out how to resume publishing a real newspaper instead of that crap that landed in my driveway this morning.

Did you check the factoid they printed at the top of the local news page -- the average milk output of a Florida dairy cow!!!! How was my life improved by knowing that fact. Gimme a break!!!!!

Anonymous said...

Any word on who will take over the editorial page now that Jane is gone, and it looks like Mike is bailing to work for Disney?

Anonymous said...

Also, how about executive editor Charlotte Hall having a conversation with the business editor last week that she doesn't want any coverage of the layoffs appearing in the Sentinel. If it was Disney, NASA or the Orlando Weekly, it'd be plastered all over the front page.

All communication about the layoffs has been through stand-up Q&As in the middle of the newsroom. There are no official memos or e-mails that can show up on Romenesko or the rest of the blogosphere.

All for what? To keep the now-sloppy redesign from being overshadowed by the many years of experience and knowledge about to walk out the door on Friday.

Anonymous said...

Due to the Tribune's current financial situation, changes will be made to the
Business Travel standards and Procedures Manual. Effective Monday the
following revised procedures apply:


All employees are encouraged to stay with relatives and friends while on
business travel. If weather permits, public areas such as parks should be
used as temporary lodging sites. Bus terminals, train stations, and office
lobbies may provide shelter in periods of inclement weather.


Hitchhiking is the preferred mode of travel in lieu of commercial
transport. Luminescent safety vests will be issued to all employees prior
to their departure on business trips. Bus transportation will be used only
when work schedules require such travel. Airline tickets will be authorized
in extreme circumstances and the lowest fares will be used. For example, if
a meeting is scheduled in Seattle, but the lower fare can be obtained by
traveling to Detroit, then travel to Detroit will be substituted for travel
to Seattle.


Expenditures for meals will be limited to an absolute minimum. It should be
noted that certain grocery and specialty chains, such as Hickory Farms,
General Nutrition centers, and, Costco, Sams stores etc. often provide free
samples of promotional items. Entire meals can be obtained in this manner.
Travelers should also be familiar with indigenous roots, berries, and other
protein sources available at their destinations. If restaurants must be
utilized, travelers should use "all you can eat" salad bars. This is
especially effective for employees traveling together as one plate can be
used to feed the entire group. Employees are also encouraged to bring their
own food on business travel. Cans of tuna fish, Spam, and Beefaroni can be
consumed at your leisure without the necessary bother of heating or costly


All employees are encouraged to devise innovative techniques in effort to
save company dollars. One enterprising individual has already suggested
that money could be raised during airport layover periods which could be
used to defray travel expenses. In support of this idea, red caps will be
issued to all employees prior to their departure so that they may earn tips
by helping others with their luggage. Small plastic roses and ball point
pens will also be available to employees so that sales may be made as time

Anonymous said...

I'm down to 2 paperclips a day. I'm sure that's too many.

Anonymous said...

I've heard 50 or more people will be "leaving" the sentinel through buyouts.

rknil said...

I wonder if this affects the designers' budget for feasts, decorations and theme parties. I guess there's lots of time to screw around when you don't have to read copy.

Destroy Roy said...

No way. This is not real, is it?? ? So sad that the state of this business is so poor that I even have to ask that...