Raleigh, N.C. — The News & Observer is cutting salaries of all employees earning $25,000 or more per year and eliminating 78 jobs in the newspaper's latest series of cost-cutting measures.

The N&O employs more than 600 people. The job reductions, which will include all operations of the newspapers as well as some voluntary severance packages, represent 11 percent of the paper’s work force.

“Most” employees also will be required to take a one-week furlough between May 1 and Oct. 31.

Publisher Orage Quarles III announced the cutbacks and layoffs today in an e-mail to employees. A copy of the e-mail was made available to WRAL.com.

Last week, McClatchy Co., the parent newspaper chain of The N&O, The Charlotte Observer and several newspapers in South Carolina, said it would cut its work force by 15 percent.

Quarles told WRAL.com that The N&O is profitable but is not meeting its targets.

The N&O has cut more than 200 full-time jobs over the past year, leaving it with 613 full-time positions, according to the newspaper. The paper's Web site lists some 165 employees in its newsroom

McClatchy, burdened by more than $2 billion in debt from acquiring the Knight-Ridder newspaper chain, has already cut jobs several times, sharply reduced its shareholder dividend, frozen pay and hiring and taken other cost-cutting measures.

“Over the next several weeks, The News & Observer will reduce its work force by 78 positions, or 11% of all employees,” Quarles wrote in the e-mail. “These reductions affect most areas of our operation. Some positions will be eliminated through layoffs, and some departments will have opportunities for employees in certain work groups of two or more to accept a voluntary severance package. If enough employees do not take the voluntary option, work groups will be reduced according to length of employment.”

Pay cuts will take effect in what Quarles described as a “graduated reduction” beginning March 30.

Employees making $100,000 and more will have their pay cut by 10 percent. Employees making between $50,000 and $99,999 will have their pay cut 5 percent. Employees between $25,000 and $49,999 in pay face a 2.5 percent cut in pay.

Other cost-cutting moves include a decision to narrow the size of the newspaper and cuts to 2009 bonuses for the publisher and vice presidents.