The publications have sharply curtailed zoned community editions and recently offered voluntary severance packages to shave about 95 workers from the payroll, a 3 percent cut. Knight Ridder spokesman Polk Laffoon won't comment on corporate strategy, but says his company's cost-cutting measures aren't much different from those of any other chain. So far, investors seem to like what they see. Knight Ridder's shares are up about 10 percent from last year, significantly better than Gannett, Dow Jones and newspaper stocks as a whole, which are 5 percent to 25 percent below year-ago levels. Longer term, Knight Ridder's stock performance has been about the same as that of other newspaper publishers, with prices roughly where they were three years ago.
Outside observers say the trick is cutting costs without cutting corners.
Cutting corners would be financial suicide, even if it did reduce costs in the short term, says Richard Tofel, a spokesman for rival Dow Jones. If we compromise that, we have compromised the basis on which we create shareholder value. That would be like Coke watering down their syrup to save money.