Media house The New York Times (NYT) Company today said it will lay off about 530 workers following the closure of its distribution unit City & Suburban.
The company said in a regulatory filing that the closure of City & Suburban in January 2009 would lead to total costs of about $53 million, which included severance packages and other items.
"With the closure, approximately 530 full-time equivalent employees will be affected and the company plans to provide severance packages to them," the filing to the Securities Exchange Commission said.
On November 25, members of the drivers' union ratified an agreement reached between the company and the union, including severance payments in connection with the closure.
As a result, the company estimates that it would record total cost of $48-53 million in connection with the closure, consisting about $30 million for staff reduction and $14 million charge related to above-market operating lease agreements, it added.
The remainder of the estimated costs are primarily related to transition costs, accelerated depreciation on certain assets and funding of a union pension plan.
The majority of these costs would be recorded by the end of the company's 2008 fiscal year-end, with the remainder recorded in the first quarter of 2009, the filing added.
In addition, the company is currently negotiating to sell a City & Suburban location that it owns, however the timing of the sale is not currently known.
Further, the company said it expects the closure of City & Suburban to improve the operating results of The New York Times Media Group by about $30 million on an annual basis.
This is a result of an estimated decrease in costs of $120 million to operate City & Suburban, offset in part by an estimated decrease in revenue of about $90 million, the filing added.
The company publishes leading dailies The New York Times, the International Herald Tribune, The Boston Globe and 16 other daily newspapers.
