George S. May Business Blog

Boston Globe forced to cut costs

Big losses at the Boston Globe have driven the CEO of the parent company, New York Times Co., Janet Robinson to issue a warning that major cuts lie in the road ahead.

“It’s going to be very difficult for me to be precise in regard to what the cost base really will be,” Robinson said during a conference call. “I will say that we are being extremely proactive in regard to lowering the cost base of the New England group.”

There are little details at this point, but we do know that New York Times Co. is negotiating with Boston Globe unions on the planned cost cuts. Recently, the company gave the Boston newspaper’s unions an ultimatum to slash costs or face shutting down.

The New York Times is well aware that negotiations with the union will be absolutely key to keeping the Boston Globe alive. The company said Tuesday the union negotiations are critical to putting The Globe on “substantial, sustainable financial footing.”

In the first quarter, ad revenue at the New England Media Group, which is mostly Globe operations, fell 32 percent. Expectations for the second quarter are even more grim.

“At this time, and it is very early in the quarter, we believe the rate of decline in ad revenues in the second quarter will be similar to that of the first,” New York Times Co. executives said during a conference call. The comment referred to the overall ad outlook at the New York Times Co., including the Globe.

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