The Dallas Morning News’ parent company announced on Monday 58 employees have opted to leave, taking advantage of a voluntary separation agreement program.
Affected employees included individuals in full- and part-time positions from both The Dallas Morning News and the media and marketing company Medium Giant.
DallasNews Corporation said it would be “reinvesting” in 11 of the 58 positions, though it did not elaborate on what that would mean or how it would impact its ability to report local news. The 58-person figure correlates to a nearly 10% staffing drop.
“The net annual savings in employee compensation and benefits in 2024, which includes the reinvestment in staff in the newsroom, will be over $3.0 million and the projected severance expense recorded in Q4 2023 will be approximately $2.5 million,” said Katy Murray, president and chief financial officer of DallasNews, according to a release.
The company has seen a significant decline in stock price over the past several years, dropping in value by roughly 79%. Its stock was trading at $18.52 on November 16, 2018. It was trading at $3.87 at close of market on Tuesday.
An analysis by Simply Wall St assessed DallasNews’ cash position and prospects of boosting liquidity. It determined the company had 4.5 years left before running out of runway.
“Since it has a market capitalisation of US$21m, DallasNews’ [annual] US$5.4m in cash burn equates to about 26% of its market value. That’s fairly notable cash burn, so if the company had to sell shares to cover the cost of another year’s operations, shareholders would suffer some costly dilution,” the analysis noted.
While Simply Wall St opined that shareholders do not need to be worried, it did note that DallasNews’ cash burn situation “warrants some attention.”
Grant Moise, CEO of DallasNews and the publisher of The Dallas Morning News, claimed the voluntary severance packages accepted by the company’s employees would “narrow [the] gap to profitability.”
“Our recent hiring of Chris Patheiger as our Chief Product and Innovation Officer is a clear indication that we remain committed to future growth and innovation as we continue to navigate the digital needs of North Texans,” Moise added, per the release.
DallasNews’ “voluntary staff reduction program,” which was announced in September, came to an end on Tuesday at noon. Its stock was trading at $4.57 that day. The stock’s value has fallen by about 15% since then.
A representative from DallasNews was not immediately available for comment.