The hedge fund that’s vacuumed up almost 100 local newspapers hit its Southern California papers with another round of layoffs Thursday, cutting jobs that the state deems “essential” in fighting the pandemic.
The Orange County Register, Riverside’s Press-Enterprise, Pasadena Star-News, and Long Beach Press-Telegram belong to the 11-paper umbrella group — called the Southern California News Group (SCNG) — that laid off numerous staffers from both the editorial and advertising sides, according to a source with knowledge of the situation.
Controversial hedge fund Alden Global Capital owns the papers and forced the cuts, the source told Institutional Investor. SCNG leaders called an all-hands meeting Thursday evening after breaking the news to each laid-off employee individually. Leaders did not tell the remaining staff precisely how many people got cut.
Journalists and editors in the sports and features divisions kept their jobs but won’t get paid for at least two weeks, per the source.
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Local newspaper staffers have endured round after round of layoffs, but this one kneecaps “essential critical infrastructure” for public health and safety, per California’s definition. State Governor Gavin Newsom last month exempted “front-line news reporters, studio, and technicians for newsgathering and reporting” from the stay-at-home order. SCNG is the primary local news source for millions of people.
There is no indication that these companies faced dire financial straits necessitating the layoffs. They were said to be turning profits ahead of the coronavirus outbreak, and may still be in the black.
A leaked set of Alden’s newspaper-group financials showed that, far from losing money, the papers delivered an industry-leading 17 percent operating margin and $160 million in profit in the 2017 fiscal year. One Philadelphia publication ran at 30 percent margins and the Bay Area papers at 21 percent, according to in-depth reporting by Harvard’s Nieman Lab.
Faced with preserving press institutions or high margins, Alden has shown a clear preference for the margins.
“What does it look like to fire essential service workers in the middle of a pandemic? It looks really bad, because it is really bad,” said Jon Schleuss, president of the labor group NewsGuild-CWA, by phone Friday. “Their work has been an essential service in keeping people alive. Journalists are the ones telling people where the testing centers are and which hospitals are overrun.”
Alden Global Capital cut almost three-quarters (72 percent) of its newspapers’ workforce between 2012 and the end of last year, Schleuss said.
Private equity and hedge fund firms tend to be unpopular with the labor movement. But Alden is in a class of its own, according to the union leader.
“They are the absolute worst at running newspapers,” Schleuss said. “These layoffs put the public health at extreme risk. Alden Global Capital has blood on its hands in this pandemic.”
Alden and SCNG failed to respond to requests for comment.