…that Stan Lipsey, publisher of the Buffalo News, has been observing this week’s tense negotiations with the Buffalo Newspaper Guild—which is fighting to prevent 50 layoffs at the paper—from his winter home in Palm Springs, California?

An update on the financial condition of the Buffalo News:

According to what management is telling the Buffalo Newspaper Guild, the News lost money in November, December, and January—$714,000 in November alone and about $1 million over those three months. Management has told the Guild that it expects to have turned a profit for February. The paper expects to be $6.6 million in the black for 2009, but only because it has already begun cost-cutting measures that it expects to save $8.4 million and has counted those projected savings in its balance sheet.

News management has told the Guild it wants to find $15 million in savings overall, and expects the Guild to help cut $2.9 million, either in jobs or in givebacks. The timetable for finding that money is short, though management has assured Guild negotiators that no layoffs will be announced before the end of next week. (That’s two weeks since publisher Stan Lipsey sent all employees this memo.) Layoffs would take effect two weeks after that announcement—so  three to four weeks.

The News is looking to its other unions to find $3.7 million in savings.

Many News employees blame the paper’s precarious position on an upper management team made complacent by the comfortable profits the company has earned since the demise of the Courier-Express. Here’s how one editorial staffer puts it:

One thing that we have to be mindful of is that in the long run, we need an employer that is financially viable, because otherwise the whole thing goes down the tubes. What want to do is help them get there while doing as little harm to our people as possible—it’s a balancing act.

But in order to get there, we need a company with leadership capable of getting us there.

As it is, our publisher is telling people the paper is going to close.

We called him on it. If he’s not prepared to stop panicking, he needs to get out of the way. We need leadership, not just cuts.

The News is not going to be able to cut its way out of this to survive. It has to grow to survive. Now they’re only in cut mode.

We mentioned to them today that Warren Buffett has made $550 million since he bought The News. This is the first time he’s ran into turbulence.

Stan Lipsey’s response is to start throwing women and children overboard. They need to recognize, that when this is done, there will still be a lot of people working for them, and those people have to feel like they’re not next for the firing squad. The way they handle this is now affects the next chapter in how we handle this business.

We don’t think (the problem) is Warren Buffett, and we don’t think it is the department heads. We think a lot of this has to do with Stan Lipsey. We said (to management) you folks need to figure out how to deal with the publisher, because he’s the most immediate problem we have. We have a bad recession, we have a bad industry, but we’ve got a publisher hitting the panic button like crazy.

We can’t survive in a panic mode. Were prepared on our side to work through those panics.

Buffalo News publisher Stan Lipsey

On Friday I read with some foreboding that Denver’s venerable daily, the Rocky Mountain News (est. April 23, 1859) had folded. That same day, Buffalo News publisher Stan Lipsey sent this memo to Buffalo News staffer:

From: News Publisher Stan Lipsey
To: All News Employees
Re: Reducing expenses at The News

I’m sorry to report that, since our meetings with employees last month,  the economic picture at The News has worsened. And now, with large metropolitan papers around the nation declaring bankruptcy or going out of business, we feel we need to act quickly.

In an effort to stabilize The News’ economics, the executive team has been working diligently to reduce costs. This is absolutely necessary in order to balance the significant reduction in advertising and circulation revenue we are experiencing.  February will be the fourth consecutive month in which the company has struggled with profitability.

Those cost reductions will take many forms, but one of them, unfortunately, is the likelihood of layoffs. Today we have detailed 52 layoffs among Buffalo Newspaper Guild employees – 33 in circulation, eight in editorial, eight in classified advertising, two in accounting and one in marketing/NIE.  These layoffs may be mitigated by successful discussions between the company and the Guild, which are expected to begin Monday.  In addition, approximately 26 News employees (not all in the Guild) have accepted the current buyout offer, which has been extended until next Friday for the Guild.

Among other cost-cutting measures are a wage freeze among non-union employees, reductions in newsprint usage through the redesign of such products as TV Topics and NeXt, and the moving of Niagara Bureau personnel in to the main newsroom.  All of these new measures, and others, follow several years of efforts to reduce costs; unfortunately, those efforts have fallen short of what is necessary.

We know that we share with you the crucial aim of keeping The Buffalo News and its mission viable as we reinvent the company amidst changing times. We ask for your help, understanding and cooperation in the weeks ahead. We will be successful if we all work together.

Last fall, about a dozen of 110 employees offered buyouts (none of them in editorial) accepted them, according to a Buffalo News report last month on its own troubles. In January, the News approached 300 more employees with buyout offers of $60,000 or more. The News has about 820 employees, according to the same report.

UPDATE: The Guild has just released a response to Lipsey’s memo:

The Buffalo Newspaper Guild is extremely disappointed that Publisher Stan Lipsey would send out a memo regarding potential layoffs before the Guild has had the opportunity to work with managers to avoid these losses.

News executives would be better served working together with the union on cost-cutting alternatives that could reduce, if not eliminate, the layoff numbers. Our bargaining agreement requires both sides to discuss feasible alternatives before staff reductions are implemented.

The Guild has had a long history of saving The News money over the years. We will be working tirelessly in the coming days to do everything possible to secure both the future of The News and the livelihood of employees who have given so much to this company and this community.

The Buffalo Newspaper Guild is the largest union at The News, representing nearly 300 employees, including the newsroom, classified advertising, circulation, customer service and accounting and bookkeeping.