A severe drop in advertising revenue, combined with steeply rising costs, has been blamed by The Irish Times management for the company's financial difficulties.
Management yesterday told staff it needs to shed 250 of the 710 jobs at the company. These figures do not include staff at the newspaper's Internet arm, Ireland.com, which is facing a separate review.
The editor of The Irish Times, Mr Conor Brady, said yesterday he realised the news had come as a shock to staff. "It's a dreadful, dreadful day for The Irish Times. We have a problem with costs and we have progressively to bring costs down."
Trade union representatives reacted angrily to news of the cutbacks and unanimously rejected the notion of compulsory redundancies. Chairman of the group of unions Mr John White said the unions would use the next few days to consult members. "We will not accept compulsory redundancy."
Mr Brady said the collapse of the IT sector "cut the heart out of our revenues and there is no sign of a turn-up in 2002". He rejected criticisms of management's failure to anticipate the downturn, and said most informed commentators, such as the Economic and Social Research Institute, had predicted a "soft landing" for the economy.
Revenues had reached an all-time high at the beginning of the year, before beginning to slide, he said. He also defended the decision to use approximately £50 million in cash reserves to build the paper's new printing plant at Citywest, Dublin. The reserves had been built up specifically for this purpose, he said.
Asked if the company might have entered into a joint venture with another party to build a printing plant, Mr Brady said: "We weren't going to get into any entailed arrangement with Rupert Murdoch, or anyone else. The Irish Times is a free and independent newspaper and we have to pay our way for that very valuable status."
The newspaper was not in a very different situation from other high-quality media businesses which were feeling the "chill winds" of recession, he said.
Mr Brady did not reject reports that cuts in the editorial department could be as high as 40 per cent, or that Ireland.com could face "radical" staff restructuring. He still expected staff would be able to produce a high-quality newspaper.
He reaffirmed management's commitment to use the partnership process to resolve difficulties. Earlier in the day he had "given a commitment to the staff that reductions will be proportionate across all departments and we will ensure they take place as equitably and fairly as we can".
He told a meeting with unions and staff representatives that while he "deeply regretted the necessity for the measures now ahead", he was "confident that The Irish Times would maintain its unchallenged place as the leading newspaper in the country in terms of its authority, its depth and its range of editorial content.
"The newspaper's character and ethos remain the same." The Irish Times would "remain independent of all external interests. It will remain primarily concerned with serious issues. It will continue to provide the most comprehensive news coverage and most informed opinion and analysis".
In a statement issued later, the company said it "faces unacceptably severe losses unless extensive savings can be achieved quickly".
It offered union representatives "an early assessment of the company's financial circumstances by an agreed and suitably qualified third party". The company was hoping that "as many as possible of the necessary 250 job losses will be voluntary. If the required savings are not secured by voluntary partings, it will be necessary to have involuntary partings".