Globe in turmoil over cost cuts

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The future of the Boston Globe, one of the oldest and best respected newspapers in the US, is once again in turmoil after its main journalists' union rejected the steep pay, pension and healthcare cuts that management says is necessary to keep the paper publishing.

The New York Times Company, the 137-year-old Globe's parent company, said it would shut the paper unless it could save $20m in annual costs. The paper has slumped deep into the red as a result of sliding circulation and a collapse in advertising revenue.

The Boston Newspaper Guild, which represents 700 editorial, advertising and business staff, narrowly voted against a package of cuts that included an 8.3 per cent reduction in salaries. The deal would also have eliminated jobs-for-life guarantees for 190 Guild employees.

In response, management said it would impose an across-the-board pay cut of 23 per cent. "Since the parties are at an impasse, The Globe will implement the wage reduction effective next week," a management statement said.

In common with all the major regional papers, powerhouses of US journalism for more than a century, The Globe has been downsizing as readers and advertisers shift to internet alternatives.

Moody's, the credit rating agency, last week warned that a growing number of newspaper groups could default on their debts.