Amid falling revenue, Sound Publishing lays off 70 workers

EVERETT — Sound Publishing has laid off 20% of its workforce at newspapers in Washington and Alaska as advertising revenue continues to crater amid the COVID-19 pandemic.

Seventy workers across all departments lost their jobs last week, the second round of cost-cutting since late March, when the statewide stay-home order forced closure of Main Street retailers, drying up a critical stream of income.

More than a dozen of those laid off worked at The Daily Herald office in Everett in sports, photo, circulation and sales and on the copy desk. Employees received severance based on their tenure with the company.

No local news reporters were cut at The Herald. However, newsroom employees had their hours reduced 20%-40% last month, and the reduction will remain in effect through at least the end of May.

“It’s just been a heart-wrenching month. This past week was so difficult, saying goodbye to so many wonderful people,” said Josh O’Connor, president of Sound Publishing and publisher of The Herald. He informed Herald employees Friday in an email.

Sound Publishing is the latest newspaper company in the state and around the country forced to retrench as society buckles down to fight the coronavirus.

In recent weeks, the Spokesman-Review in Spokane and the News-Tribune in Tacoma stopped printing Saturday editions. The Stranger in Seattle suspended its print edition. The Seattle Times avoided potential layoffs, for now, with a federal small business loan.

The Poynter Institute, which keeps track of industry moves on its website, admits it’s “getting hard” with all the bad news these days.

Sound Publishing, which began the year with around 350 employees, owns 43 newspapers across the state plus three in Alaska. It is a subsidiary of Black Press of Victoria, British Columbia, which also owns newspapers in California and Hawaii.

In March, in the midst of a precipitous decline in ad revenue, the company made a series of moves to trim expenses. Those included furloughs and reduced hours for workers and an end to contributions to employee 401K retirement plans. They also suspended print editions of 20 publications, including the Marysville Globe and the Arlington Times.

Friday’s action comes with ad receipts still down as much as 70% for some publications.

“We’re struggling to make payroll,” O’Connor said, noting that savings as a result of the layoffs “mirror realities of where our revenues are going to be in a month.”

Even when current restrictions are lifted and the broader economy reopens, it will be a while before revenue rebounds for the newspapers, O’Connor said.

Company officials are putting together a plan to operate post-COVID, he said. Sound Publishing will be in need of federal assistance via a small business loan through the Paycheck Protection Program, he said.

“What we don’t know at this time is whether we’ll be eligible for the forgiveness aspect of the loan,” he said.

Next month, the company is looking to resume printing weeklies in Kent, Auburn, Federal Way, North Kitsap, Port Orchard and Forks. The goal is to do so during the weeks of May 18 and 25, which might enable some furloughed employees to return to work, O’Connor said.

Resumption of printing of the other 14 publications will be decided at a later date once there is a better sense of what the economic recovery looks like, O’Connor said. As of Monday, neither the Marysville nor the Arlington paper had any staff.

Meanwhile, the ranks of the Herald will grow June 1 with the addition of a news reporter through the Report for America project, a national program that places journalists in local newsrooms to report under-covered issues. The nonprofit covers half the salary, with the remainder covered by The Herald and community support.

And in a separate undertaking, roughly $90,000 has been raised through the Snohomish County Community Foundation for an investigative journalism initiative at The Herald, O’Connor said. The goal is to raise $500,000 to create an endowment that will fund two reporting positions.

“That’s a really great example of how this community is supporting us in this pandemic,” O’Connor said.

In the meantime, O’Connor said, the next few weeks are critical, and he is hopeful Gov. Jay Inslee keeps an eye on protecting public health and shifting gears to getting the economy going.

If the pace is too slow, he said, “we will continue to be in trouble.”

“Every day, every week that goes by it becomes increasingly difficult for businesses to succeed in the future,” he said.

Jerry Cornfield: 360-352-8623; jcornfield@herald net.com. Twitter: @dospueblos.