Newsroom staff at The Dallas Morning News filed into the downstairs auditorium somberly. It was going to be bad. That much they knew. Reporters and editors had been openly speculating for weeks that declining revenues, increased spending on post-September 11 coverage and the $37 million write-off known as CueCat would force the Death Star commanders at Belo Corp. to jettison someone. They just didn't know how many someones, only that said someones would most likely not have the letters "v" or "p" in their titles.

At 1:30 last Wednesday afternoon, they and others at The News in separate but simultaneous meetings found out the details: Belo was trimming 160 people companywide. If those cuts are proportional--and all indications are that they will be--then The News, by far the biggest employer within Belo, will lose 60 to 65 people. How many of those pink-slipped will be reporters or editors? Best guesses from managers and middle managers ranged anywhere from eight to 15--meaning no one knows for sure. This of course doesn't factor in the many jobs still left unfilled that have come open during the past year.

As vice president/managing editor Stuart Wilk told one group of reporters and editors, "This is the day that none of us, in our wildest imaginations, ever envisioned would happen here."

An appropriate response to which is, "Oh really?" What about the company's performance in the past year would suggest anything but layoffs ahead? Every quarter, revenue is down 10 percent or so from last year; freelance budgets have been curtailed or frozen; positions have gone unfilled; the stock price, which once tickled 20, has long hovered between 15 and 16, although it hit 17 this week; meaty profit centers called "classified ads" have shrunk tremendously; and, of course, the company preceded this parade of good fortune by investing nearly 40 mil in the CueCat, the biggest bust since Anna Nicole Smith.

And then there is the financial blow Belo willingly dealt itself this week, which was confirmed just before deadline: That Belo Corp. and its law firm have agreed to pay former Dallas school board member Dan Peavy a combined $5 million to settle Peavy's illegal wiretapping case against Belo, the law firm and former Channel 8 reporter Robert Riggs, who was dropped from the case as part of the settlement. (A full report on this will be in next week's Observer.)

Without CueCat, would a financial day of reckoning have occurred regardless? Quite possibly. The economy was wheezing before September 11, and The News is spending lots of money it didn't budget (as is every hard-news operation) in covering the war overseas and terrorist threats in the United States. But let's just say it couldn't have helped.

"I can't argue with the job cuts," says one staffer, "but what sucks is that they announce these cuts but won't say how many people, who they are and when they can start collecting unemployment."

One last-hope counteroffer in the works: There is talk among some staff members that they would like to voluntarily take a 5 percent pay cut throughout the company if that would mean everyone keeps their jobs.

Also on the job-reduction front, the Dallas Observer recently laid off three staff writers: Miriam Rozen, Jonathan Fox and longtime theater critic Jimmy Fowler. All three contributed award-winning stories to the paper, and all three will be missed. This was in reaction to the soft advertising market and general suckiness of the economy. (Stop me if I get too technical.) Combined with four staff writing positions that have not been filled, the Observer employs seven fewer writers than it did this time last year. In fairness, it should be noted that this is a proportionally greater reduction in editorial staff than The News'. The major difference: We don't have CueCat to blame. That chuckle you hear comes from the Death Star.

Some kudos are in order, though, for the way in which fresh-faced, spunky newsboy publisher Jimmy Moroney responded to the Morning News bean-counters after the September 11 tragedy. During a meeting that morning, there was a question as to whether the daily would have enough space to accommodate all the news coverage. After a few minutes of listening to someone go through all the space-crunch scenarios, Moroney piped up and announced to newsroom managers, "Just write the stories; we'll find space for them, even if we have to pull ads off pages." We're sure that Belo bigwig Bobby Decherd was thrilled to hear that.

Fort Worth Weekly, commonly called the Fwweekly, is no longer a sister paper to the Dallas Observer; now it's a third cousin. The Fort Worth alternative weekly was bought by the Observer's parent company, New Times Inc., in August 2000, but two weeks ago it was purchased by its publisher, Lee Newquist, who was publisher of the Observer for nine years. Newquist then fired the Fwweekly's editor, John Forsyth, who was always outspoken in his disgust that the locally owned paper was purchased by a national alt-weekly chain--the chain that no longer owns the Fwweekly. Adding to the confusion, the two papers will continue to share news stories, reviews and some business resources for the time being. All of which begs the question, "What the fwwuck?"

Newquist says that he went to the Fwweekly because he's excited about the growth of the Tarrant County market (true) and because he was the person who pushed New Times to buy the paper and therefore wanted to make it succeed (true, although there are some people within New Times who say this was a flat-out demotion for Newquist, who formerly oversaw several New Times papers). During several meetings with New Times Chairman and CEO Jim Larkin, Newquist says, the idea of his purchasing the paper was born and borne out. Newquist wouldn't comment when presented with the rumored fire-sale price--$200,000 and change--but he did say that sole ownership was necessary for the paper to succeed. "It allows me to put 100 percent focus into making this paper work," Newquist says, "and gives me the authority to do the things I think need to be done."

One of those things was to fire Forsyth, which Newquist did in a phone call to Venice, Italy, where the editor was beginning his vacation. Newquist promoted managing editor Gayle Reaves, a former award-winning writer at The Dallas Morning News. Newquist says he's now switched to a hiring mode, looking for a few edit positions and more salespeople. "I may be the only paper in the country hiring right now," he says.


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