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Mercury News reduces layoffs after deal

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SAN FRANCISCO (AFX) - After a 20-hour bargaining session ended Monday morning, the San Jose Mercury News and its union reached a tentative agreement on a two-year contract that reduced the number of workers to be laid off.

The 263,000-circulation daily newspaper will eliminate 27.5 full-time positions, down from the 69 positions originally slated to be cut.

The paper, which employs 490 members of the San Jose Newspaper Guild, guaranteed it would not lay off more union workers through June. Managers will notify employees of the layoffs by Tuesday morning.

Laid off workers may receive two weeks pay for every year of service, up to 10 weeks of salary, and two months of paid health care.

The reduction in layoffs was welcome news among reporters, photographers and other editorial workers, who wore black Monday to show solidarity with soon-departed colleagues.

"Nobody wants to see good journalists and friends walk out the door," said columnist and guild member Mike Cassidy. "But I'm encouraged because it shows that the owners of the paper do have a concern for quality journalism and are willing to try to work with the unions to remain the paper it is."

Newspaper spokesman Dan Breeden confirmed terms of the agreement but would not comment further.

Luther Jackson, executive officer of San Jose Newspaper Guild, did not immediately return calls Monday.

The contract provides 2 percent annual wage increases and a $1,000 bonus meant to help reduce the sting of a new health plan that requires members to pay at least 20 percent of premiums.

The company froze its pension plan and replaced it with a 401K matching contribution of up to 3 percent if an employee contributes 6 percent.

Despite concessions, the agreement offers a measure of stability in a newsroom rattled by corporate turmoil.

MediaNews Group Inc., the nation's fourth-largest newspaper publisher, acquired the Mercury News, the Monterey County Herald and Contra Costa Times from McClatchy Co. earlier this year in a complex deal valued at $1 billion. MediaNews also owns the Oakland Tribune and seven other Bay Area newspapers.

The Mercury News was previously owned by Knight Ridder, the nation's second largest newspaper publisher, which put itself up for sale late last year under pressure from shareholders unhappy with a sagging stock price. The slump reflected investors' souring sentiments about traditional media as the Internet siphons away advertising revenue.

The new contract, which expires in October 2008, permits MediaNews to coordinate news coverage and advertising with other papers in the chain.

Late last month, a federal judge issued a temporary restraining order on the San Francisco Chronicle, whose parent company, Hearst Corp., appeared interested in collaborating with MediaNews on local distribution and national advertising sales. U.S. District Judge Susan Illston said such a deal would possibly violate antitrust laws. Copyright 2006 Associated Press. All rights reserved. This material may not be

Copyright 2006 AFX News Limited. All Rights Reserved.

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