Mumbai-headquartered newspaper Daily News and Analysis, launched in 2005 by an equal-stakes JV between Dainik Bhaskar’s publisher DB Corp Ltd and Subhash Chandra’s Essel Group, will soon cut 30-35 jobs, CEO K.U. Rao told contentSutra. “We have reduced pagination from 42 in July last year to 32 now. So we need to reduce manpower proportionately,” Rao said. DNA employs 850 people across five editions—Mumbai, Bangalore, Pune, Ahmedabad and Jaipur.

In a telephone Q&A, Rao said that DNA’s revenues grew 24% during the current fiscal. He claimed that the company has met bottomline targets and is in line to break even by 2011-12.

Following are excerpts from the Q&A:

Will salary cuts follow the job cuts? Any other cost cutting measures?

I announced in early January itself that there won’t be increments this year. But there are no salary cuts. We would rather cut flab and make the company a more lean and efficient machine than cut people’s salaries.

Why do you think so? Isn’t there a humanitarian argument that some salary is better than no salary?

Salary cuts have a big demoralizing effect. Also we think it’s inappropriate to engage somebody after negotiating something with them and then cut that. All we are doing now is to rejig manpower to meet the requirements of the current pagination.

If you are taking manpower out of the system, it means you don’t see a recovery anytime soon?

Oh I have been saying that I don’t see a recovery happening for the next 18-24 months. As you know, the newspaper business is totally dependent on advertising. When companies set their marketing budgets for a year, they don’t revise it mid-year. So if spending levels are low now, it’s not suddenly going to jump up. Any chance of recovery is only next year.

How are your expansion plans being hit? You had started installing capacity in Hyderabad?

Not in Hyderabad. We ordered a lot of presses and whatever capacity has been ordered for DNA, we have installed them. We installed new capacity in Bangalore, Pune and Jaipur. All our expansions plans are along planned lines. Everything has been completed on schedule.

Do you regret now that you went ahead and launched the Bangalore edition when things had started looking a bit gloomy?

No. I think we did the right thing by launching in Bangalore. The edition can establish itself now and it will be well positioned to reap the benefits when the times get better. And Bangalore is doing extremely well, it is exceeding my expectations.

But are you prepared to bankroll it till the times get better? That’s two years, by your estimates.

Yes, absolutely. Bangalore is the least of my worry. My bigger concern is getting Mumbai (edition) back up and running.

What kind of revenue slowdown are you facing? How has your bottomline been impacted?

We just closed our books for the financial year from April 2008 to March 2009 and revenues are up 24%. I’ll break that up further. During the seven months from April to October last year, we grew 45%. Then the market went into a tailspin and November, December and January, we faced a decline. February was good and March is also not so bad. The cumulative impact has been that our topline grew 24%.

And how have losses narrowed? When do you expect to break even?

We responded quickly when newsprint prices started going up. We have been able to entirely offset the impact of higher newsprint and adverse dollar movement by cutting pagination. We were one of the first publishers to respond to the changing situation. As a result, we have been able to meet our bottomline targets and we are entirely in line to break even in 2011-12 as planned.
I think we managed the negative impact well. Starting April 1, the lower-priced newsprint will kick into our books.

Any other cost cutting measures you are adopting?

We have closed some of our smaller circulation offices. That’s also part of a strategy to increase revenues from subscription. In Mumbai, we have closed the earlier pricing of Rs199 for the whole year. Now it is Rs399. In Pune, starting April 1, we will withdraw the introductory offer and will go into full pricing. These translate into a lot of money. We are looking at every possible stream of revenue and keeping costs as tight as possible.

There is no cost cutting in Bangalore or Pune. They are new editions.