The New York Times Co will close its distribution unit in New York by January 2009 and lay off around 530 employees, the company said in a filing with the Securities and Exchange Commission.
The closure of the City & Suburban unit that delivers The New York Times and other newspapers and magazines to newsstands and retail outlets in the New York metropolitan region is estimated to cost the company up to $53 million in employee severance charges.
The closure was first announced in September. But the company was unable to provide an estimate of the charge at that time. New York Times Co now estimates the planned closure of its New York-area distribution operations to cost $48 million to $53 million.
After the closure, the company plans to distribute The New York Times and its other publications through third-party wholesalers and the company's own drivers.
Also, the company is in negotiations to sell its property that houses the distribution unit, it said.
The closure would also improve the operating results of The New York Times Media Group, raising it roughly by an annual $30 million, the company said in its filing.
The New York Times, like several other newspapers in the US and Europe, is cutting costs to survive amidst falling circulation and a big dent in advertisement revenues.
The company, which slashed dividend by nearly 75 per cent recently, is also planning to sell parts of its business as the financial crisis worsens. The closure charges will be entered into the company's books by the end of 2008 and in the first quarter of 2009.
The Times, which also publishes the Boston Globe and other newspapers, is burdened with a $1 billion debt and is looking for ways to pay off the money.
The company expects to recover most of the costs by the end of next year.