Washington City Paper employees learned this afternoon they will take a 5 percent pay cut effective this week, as will the staffs of its sibling publications Creative Loafing Atlanta and the Chicago Reader. It was also announced that Atalaya Capital Management, the priviate-equity firm in New York that owns the Creative Loafing chain comprised of the three alt-weeklies is looking to sell the papers. (Disclosure: I have been a freelance contributor to the City Paper since April 2010.)

There will also be layoffs at the Reader and Creative Loafing Atlanta, Andrew Beaujon of Poynter reported. (Beaujon was City Paper’s managing editor from January 2006 to May 2010.) It was announced last week that the Reader was up for sale. No layoffs are planned at the City Paper, which is already short-staffed after the departure in recent months of staff writers Dave McKenna and Rend Smith in addition to long-term vacancies at the assistant managing editor and online producer positions.

Amy Austin, the City Paper’s publisher, told employees today she is hoping to land a local purchaser to take control of the 31-year-old alt-weekly.

The City Paper has already changed hands several times in recent years. It was owned by the Chicago Reader through 2007 until Creative Loafing purchased the papers. Creative Loafing declared bankruptcy in 2008 and was itself purchased by Atalaya in August 2009. It formerly included papers in Tampa, Fla. and Charlotte, N.C., which were sold to another media group last year.

Creative Loafing executives Alison Draper and Tammy Bailey also sent the following memo to employees at the City Paper, Reader and Creative Loafing Atlanta:

Today’s news of company-wide wage reductions, job restructuring and job eliminations, combined with Monday’s report of increased activity from potential buyers of the Chicago Reader, makes for a difficult week for our organization. The expressions of serious interest from potential suitors bring to light the tremendous opportunities on the horizon.
We must do what so many news media organizations around the country have done: realign our organizations and ourselves to face the new and rapidly changing media landscape.

The job eliminations and wage reductions are a necessary action to put each of our properties on solid financial footing, allowing us to protect our organization against uncertainty—and therefore continue the important work we do.
Our papers and websites are of great value and importance to our cities. It is important that we continue providing the same high quality publications and services to our readers and advertisers, and having the proper operating and expense plan is imperative. Regardless of who the shareholders are, we need to be nimble and concentrate on sustainable growth initiatives.

As you all know, as covered in the Chicago press, the properties have had an increased number of inquiries from potential suitors. Our owners have expressed interest in exploring those opportunities. We believe this provides an opportunity for our properties to align with a new owner who understands the legacy of our brands, respects the impact they have in our cities, and has the infrastructure and vision to help bolster our unique local reach in the rapidly evolving digital media environment. We have been working very closely with Atalaya and Bulkley to ensure this is possible.

As we undertake this process, we all must stay focused on continuing to execute our strategies for increasing audience and revenues. We know this is not easy for any of us, however we are more committed than ever to produce great content for our beloved cities. Your hard work and dedication as we strive to achieve the best outcome for Washington City Paper, Creative Loafing Atlanta and the Chicago Reader are integral not just to our near-term goals, but to the kind of future we want for these iconic publications and for ourselves.

Alison & Tammy