Sun-Times to cut jobs, $50 million

Sun-Times Media Group Inc., owner of the Chicago Sun-Times and dozens of smaller area newspapers, said Friday it will reduce operating costs by $50 million in 2008 and make more layoffs in the face of a "terrible" market for print advertising.

The company, under pressure from shareholders to return to profitability and boost its collapsed stock price, said its board of directors endorsed management's latest cutback plan Thursday. A year of restructuring moves under Chief Executive Cyrus Freidheim have yet to pay off; Sun-Times Media lost $192 million in the third quarter on a 7 percent decline in revenue.

The latest plan, to be implemented in the first half of the year, includes $10 million in anticipated savings from its recent distribution agreement with the Chicago Tribune and the consolidation last month of two suburban papers, the Daily Southtown and the Star into the Tinley Park-based Southtown Star.

Freidheim told the staff in a memo it will be "by far the biggest cost-reduction effort in our company's history," including a reduction in staff, further outsourcing of selected activities and reformatting of the company's products.

"The market for print advertising has been terrible," Freidheim said.

In separate remarks aimed at investors, he said, "The future of the company rests on management's ability to size anticipated costs with anticipated revenues to achieve profitable operations."

Sun-Times shares rose 6 cents to $1.20 in Friday trading.