McClatchy finally reduces dividend - and reduces staff yet again

McClatchy (MNI) company announced today they would reduce their dividend by half to nine cents per share. They did this along with a note they would be cutting an additional 1150 jobs, the second such announcement in as many quarters.

The stock was down 8 percent in afterhours trading, but the true tale will be told in the morning.

To my eye, nothing in the announcement was good news. The stated reason for the reduction in the dividend was to pay down debt. Continued job cuts are also bad news. Revenue continues to fall off a cliff, and internet growth has stalled.

It's clear that the structural changes here are far in excess of newspaper's ability to see the strategic future. I'm no fan of layoffs in general, but if you have to do them it's best to do them all at once. The announcement just hangs over employee's heads and creates a huge distraction. Afterward there is always a period of adjustment while jobs get redistributed.

Sigh - There doesn't appear to be any growth strategy here at all. You can't cut your way to growth, and McClatchy seems to see that as the only option.

The debt they need to service is harsh and unforgiving. So is the economic situation they face. Rock, meet hard place. Hard place, meet Rock.