November 2, 2016 Last Updated 4:03 pm

WSJ to combine sections, institute layoffs, in move to create ‘more digestible paper’

Move comes the week before News Corp is to announce earnings, which are expected to show a sharp decline in print advertising in its News and Information Services division

It’s an ugly day at The Wall Street Journal, the Dow Jones owned financial newspaper (Dow Jones is itself owned by Rupert Murdoch’s News Corp). The union had been informed of impending layoffs that might follow voluntary buy outs, and today the paper announced that it would greatly reduce its Greater New York staff, and combine sections.

The print newspaper, to debut on Monday, November 14, will be reduced to two sections on Tuesday, Wednesday and Thursday, with a third section on Monday and Friday, leaving the weekend edition as is. For many readers, it will be a return to the way the paper was sectioned prior to its purchase by Rupert Murdoch.

wsj-front-11-2-16-330“Our uniquely engaging lifestyle, arts, culture, entertainment and sports coverage now featured in Personal Journal and Arena will be combined in a section named Life & Arts, and included in the main news section of the paper every day from Monday to Friday,” editor in chief Gerard Baker said in a staff memo. “This new part of the A section will also feature the cultural commentary and criticism written by the Editorial Page’s team of critics that currently appears in PJ and Arena. The name Life & Arts not only better captures the range of this combined content but also aligns more closely with the relevant sections in our digital products.”

“All newspapers face structural challenges and we must move to create a print edition that can stand on a sound financial footing for the foreseeable future while our digital horizons continue to expand. As I previously mentioned, there will unfortunately need to be an elimination of some positions as part of this process,” Baker wrote.

“But I want to stress that these changes and their ramifications for the newsroom are necessary not just because we must adjust to changing conditions in the print advertising business, but because we know from audience research that readers want a more digestible newspaper.”

The move comes a week prior to the release of News Corp earnings, which would be expected to show the kinds of print advertising declines that many other publishers have already reported this quarter. The New York Times Company, for instance, today said that print advertising revenue fell 18.5 percent, though digital ad revenue was up a robust 21.4 percent.

The Independent Association of Publishers’ Employees said today that 19 IAPE-represented employees will be losing their jobs through the layoffs, while 48 employee requests for buyouts were accepted prior to the layoff announcement. At least one report said that employees who remain will be asked to reapply for their positions, a move that was common with Advance Publications when they reorganized their newspapers.

News Corp, the owner of Dow Jones, was spun-off the old News Corp, with the publishing division retaining the corporate name, and the film and cable TV division becoming 21st Century Fox.

News Corp, despite the spin-off, is a more diversified media company than many others that also went through a spin-off. The News and Information Services division includes not only newspapers but also News America Marketing. There is a Book Publishing division which includes Harper Collins, and not that long ago the company bought Move Inc., the owner of, to form its Digital Real Estate Services segment.

While the News division accounted for over 64 percent of revenue last fiscal year, it accounted for less than a third of profits. Those numbers are likely to change, with the newspapers contributing a smaller percentage of revenue, and a dwindling amount of profits, if any at all.

Update: 21st Century Fox today reported earnings and said revenue rose 7 percent, net income rose 20 percent. Guess it is good to be on the broadcast side of the media business. Earnings report here (PDF)

Readers are not being sympathetic to the WSJ, with many claiming the paper is similar to other newspapers – that is, too liberal. The WSJ is, of course, known for its financial straight news, but its conservative editorial positions. It is unlikely, however, that many of those complaining the paper being representative of the “mainstream press” were ever subscribers to the print newspaper, but online readers.

This is a dilemma for newspaper publishers. While print subscribers, and print advertisers, in the past provided the paper with plentiful profits, the drive to build online audiences has meant a new reader is being reached. Newspaper ad veterans know that the biggest sales feature of newspaper was not its reach – which could be beaten by marriage mail companies – but its demographics. Today, however, many newspapers (and for that matter, magazine companies, as well) are striving for greater reach, either to sell more digital subscriptions, or to sell more digital advertising (or both).

But many of these readers are demanding what they see in some of the websites that are supporting Donald Trump this election, a more combative, aggressive form of news. If newspaper publishers really want to pursue this audience they can, and they will not need a large newsroom to do so. But if they want to retain their more upscale, highly educated audiences, they may decide that alienating their paid subscribers by having to have them read through comment threads filled with nonpaying readers, often railing against the paper’s own coverage, is not a sustainable idea.

Today, papers are moving in both directions at once, attempting to lure these previously nonpaying readers, while at the same time attempting to claim that their news organizations are the polar opposite of their cable TV and alt-right website competitors. It will be hard to prove their case when their websites are filled with the same reader discussions seen on Breitbart News.

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