San Francisco Chronicle Facing Closure

SAN FRANCISCO -- The owner of the San Francisco Chronicle will sell or close the daily newspaper if it can't dramatically lower expenses soon.

In a statement, the Hearst Corp. said the newspaper "is undertaking critical cost-saving measures" and that these savings need to be "accomplished within weeks."

Hearst didn't specify a savings target in Tuesday's grim announcement, but the New York-based company said the cost cutting will require significant layoffs of its unionized and nonunion employees.

After years of struggles, the San Francisco newspaper's troubles have worsened amid the longest recession since the early 1980s. Hearst said the Chronicle lost $50 million last year and is hemorrhaging even more money so far this year.

Several other struggling newspapers around the country are also on the sales block, have filed for bankruptcy or are facing a possible shutdown.

"Because of the sea change newspapers everywhere are undergoing and these dire economic times, it is essential that our management and the local union leadership work together to implement the changes necessary to bring the cost of producing the Chronicle into line with available revenue," Frank A. Bennack, Jr., vice chairman and chief executive officer, Hearst Corporation, and Steven R. Swartz, president of Hearst Newspapers, said in a statement.

"Survival is the outcome we all want to achieve. But without the specific changes we are seeking across the entire Chronicle organization, we will have no choice but to quickly seek a buyer for the Chronicle or, should a buyer not be found, to shut the newspaper down."