Patrick Soon-Shiong purchased both of the Los Angeles Times and San Diego sister papers for $500 million in 2018 with hopes to see them flourish and flourish under his ownership. But they face an uphill struggle; media industry spending cuts have dramatically shrunk margins, leaving local stations competing against national platforms with larger subscriber bases. The Layoffs The Los Angeles Times cut 74 jobs Wednesday - or 13% of its newsroom staff - as part of efforts to ease financial strain caused by declining ad sales and readership. These layoffs affect reporters, editors and copy editors as well as temporary workers and managers within departments such as news, sports, business and entertainment as well as temporary staff in temporary roles or on audience engagement teams. Reporting positions should remain unaffected but support roles such as news desk staff will likely be reduced significantly. The move enraged the LAT Guild, the union representing newsroom staff. Their leaders claim they were taken aback when the announcement was made shortly after it had already announced job cuts at other offices across Southern California. Furthermore, they accuse the paper of breaching contract requirements that mandate that plans for layoffs or buyouts must be disclosed beforehand and made known. Editor Kevin Merida informed employees in a memo that the newspaper faced a deficit of millions of dollars and needed to reduce costs in order to remain profitable. He pointed to "persistent economic headwinds," such as decreased digital subscriptions and declining ad revenues from local businesses as factors leading to this situation. Furthermore, declining newspaper sales also were factors. Merida did not reveal specifics, but did disclose that the company offered buyouts to some employees to clear room for layoffs and make room for more buyouts. Furthermore, they are working towards increasing revenue through developing new products including an innovative subscription model. Though Merida noted the newspaper has never experienced better staff in its history, it has undergone significant turmoil since biotech billionaire Patrick Soon-Shiong purchased it and other publications from Tribune Publishing (renamed Tronc) for $500 million in 2018. Soon-Shiong promised investments into the paper and hiring more journalists; The Times won two Pulitzer Prizes last month but has struggled financially ever since his acquisition. The original list of 73 employees to receive pink slips was heavily weighted toward those working in departments related to local news and content such as copy editing, audience engagement and photography. According to reports, 19 Latinos, 11 Asian Americans, four blacks and five individuals who identify with multiple races received pink slips. The Asset Sal The Los Angeles Times will cut 74 jobs - or 13% of its newsroom staff - according to an executive editor Kevin Merida's memo sent Wednesday, said in part to copy editors, audience engagement specialists, audio producers and producers, with reporting positions remaining unaffected. This marks the first round of layoffs since billionaire Patrick Soon-Shiong purchased it from Tribune for $500 million with promises that it remain locally owned and profitable. Merida pointed to falling advertising revenues and digital subscription losses as reasons for his cuts, as well as an ongoing decline in print advertising - which provides most of their income. He stated that the decision to reduce staff was made after careful consideration, yet was necessary in the light of future growth plans and revenue-generation objectives. To do this, "as we focus on areas where revenue generation can occur more efficiently", he wrote, and required specific changes be implemented. KPCC spoke with several employees who reported being offered buyout packages. Kenneth Weiss, who spearheaded a series of stories that resulted in the LA Times winning a Pulitzer Prize for explanatory journalism, accepted his buyout offer and is expected to leave by mid-July. Reed Johnson, chair of LA Times Guild unit council chair Reed Johnson said it was deeply troubling that management hadn't informed the union in advance about plans to reduce staff - something required under current contract which remains valid until new one is signed. MediaNews Group of Denver is now the new owner of The Los Angeles Times and its employees. Their spokesperson declined to provide further details of this sale but did indicate it would be made in order to serve both their interests as well as that of The LA Times staff members. The Investments On Wednesday morning, The Los Angeles Times shocked its newsroom by announcing it would lay off nearly 13% of its 74-member staff - the first large-scale cuts since biotech entrepreneur Patrick Soon-Shiong purchased it last year from its previous Chicago owners, saying at that time that he wanted to protect it from similar cuts under previous ownership. The Times newsroom had already experienced difficulties, with daily print subscriptions falling from 250,000 in 2020 to less than 300,000. Furthermore, advertising revenue--a key source of earnings--was also declining dramatically. Newsroom staffers had many questions for Executive Editor Kevin Merida that afternoon at their all-hands meeting; unfortunately he could provide no satisfactory responses. Merida reported that his company made difficult decisions to cut expenses, due to "persistent economic headwinds". Although layoffs of journalists was an unwelcome step, Merida explained they are necessary for survival in today's digital era. Merida has implemented various strategies designed to restore profitability for The Times; however, none have shown much promise so far; last year alone saw it lose over $5 million and its digital subscriber base fail to grow fast enough to cover this shortfall. The Times has not announced its intention to cut costs further, yet unionized employees anticipate further job cuts. The LAT Guild stated it will negotiate with management for a new contract; in the meantime it has taken an active stand against planned layoffs by taking out ads opposing further layoffs. The union noted that Merida's proposed layoffs would disproportionately harm people of color; 19 of 73 affected workers identified as Latino and 11 Asian American. Furthermore, the newsroom was about to lose one of only two Spanish-speaking photographers that covered a region with significant Latino populations; eventually Merida agreed to reinstate one photographer; also offered to step down voluntarily from a managerial role and accept buyout offer, thus decreasing planned layoffs from 74 to 56. The Future MediaNews Group, the new owner of Los Angeles Times and San Diego Union-Tribune newspapers, recently informed staffers in a memo that it will offer buyouts through next Monday; those laid off will depend on staffing needs according to MediaNews Group. In its memo, the newspaper also detailed their plans to reduce costs and explore new revenue sources, such as podcasting or developing video content or testing subscription models for their website. However, this could mean more layoffs and cost cuts for news companies of all types, with BuzzFeed (which axed its news division), Vice, NPR, and CNN all cutting staff and staffing levels in recent months. Patrick Soon-Shiong purchased the Los Angeles Times and its community papers for $500 million in 2018, marking a return to local ownership after years of cuts at Tribune Publishing. While he vowed to keep it independent and financially sound, this has proved more difficult due to declining revenues from advertising sales and subscriber numbers in general. At first blush, the Times's decision to cut 74 jobs is quite alarming; that number constitutes a substantial portion of their workforce and comes just months after two Pulitzer Prize-winning journalists published investigative pieces about secretly recorded conversations among city officials and chronicling life on the streets for homeless women living there. KPCC spoke with a representative for the Times who explained that layoffs were caused by economic challenges affecting the industry. 250,000 subscribers access its digital news site compared with over 3 Million for The New York Times and 2.5 Million for The Washington Post respectively. Other news sites and magazines have also begun cutting staff, with Disney-owned FiveThirtyEight recently cutting 108 employees and shuttering its printing press. FiveThirtyEight founder Nate Silver's contract expires at the end of 2023; it appears likely he will leave when it ends.