New owners of PMH send letter on layoffs

A week after The Inquirer, the Philadelphia Daily News, and Philly.com were sold at auction, employees are receiving a letter warning of possible layoffs, though the new owners say that it is a federally required technicality and that no job cuts are planned.

The new company "will continue as the employer of all employees," says the letter mailed to union employees or their representatives Friday. It adds that the letter also serves as "notification" if the federal WARN Act applies to any future company action.

That is the Worker Adjustment and Retraining Notification Act, which requires 60 days' notice in the case of mass layoffs.

A top union official said that it was a "procedural letter" and that he had been reassured that no job cuts are planned by the new owners, a group of the newspaper company's senior lenders. The papers employ about 4,500 full-time and part-time workers.

"They reiterated their commitment to offering employment to all current employees," said Dan Gross, a Daily News columnist and president of the union that represents newsroom and advertising employees.

The letter, on Inquirer and Daily News letterheads, is accompanied by a letter from Brian P. Tierney, chief executive officer of Philadelphia Newspapers L.L.C. Tierney has been locked in a contentious and public battle with the senior lenders, who purchased the company last week for $139 million in a bankruptcy auction. The company has been in bankruptcy since February 2009.

Tierney's letter says the notice was sent "with a heavy heart, but at the direction of the prospective owners." In an interview, Tierney said, "It's not normal, it's not what we did before," when the investors he led purchased the newspapers in 2006.

Tierney added, "I think people are savvy enough to figure out what they think it means."

The new owners are headed by New York-based hedge funds, including Alden Global Capital and Angelo, Gordon & Co.

Gregory J. Osberg, former president and worldwide publisher of Newsweek and Newsweek.com, has been named publisher and chief executive officer for the new owners, and Robert J. Hall, publisher of The Inquirer and the Daily News for 13 years, ending in 2003, has been named chief operating officer.

"Our intention is still exactly the same as it was before," Hall said. "There will be no massive layoffs when we take over the company."

"The letter is a procedural letter. It was agreed they would send it out up at the auction in New York," he said. "The old company goes out of business that day and we start anew."

"I'm a savvy guy and I have no idea what Brian is trying to say," Hall said.

Gov. Rendell said Friday that he was contacted by a company lawyer who assured him that the letters were required because of "an entity change" and that there were no plans to lay off employees.

Rendell said that if that was true, and there were not unilateral reductions in wages and benefits, "I don't have a problem." But he added, "if they unilaterally offer . . . wages at 75 percent or 50 percent benefit cuts, that would be absolutely wrong and a betrayal of the process."