Facing rising costs for gas and newsprint, plus declining ad revenue, The News and Observer Publishing Co. offered voluntary buyouts to some employees Monday.

The newspaper will offer buyouts to about 200 workers, but only a small percentage is expected to accept the deal and depart the company May 23, publisher Orage Quarles III said. The final number won't be known for a few weeks.

The move follows other cost-saving efforts by the company, including eliminating some positions through attrition, combining sections to save newsprint and redesigning elements of the paper.

"We are not taking this lightly," Quarles said. "We understand what uncertainty means to people."

Employees who are working in positions that could be eliminated using technology, efficiencies or consolidation of jobs were deemed eligible for the buyout offers and were notified Monday. Only the company's 762 full-time employees were eligible. Buyouts were offered to employees in departments throughout the company.

In the newsroom, for instance, three to five jobs will likely be cut, Executive Editor John Drescher said. Those jobs will come from the pool of editors and news research employees. No reporters, photographers or graphic artists will be affected by the voluntary buyouts.

"While I hate to lose any editors, I think this is the best way to move forward and keep the quality," he said.

People who take the buyouts will receive a certain amount of pay for each year worked. They have until May 12 to decide whether to accept the offers.

Once the company knows how many employees have accepted, management will decide which volunteers will actually leave, Quarles said. Because some departments had several employees who were eligible, the company may choose among workers in departments in which several people volunteer.

"It depends on how many people sign up," Quarles said. "We'll have to see."

Quarles said there is no set back-up plan for the possibility that too few employees take the offer. "Once we know that for sure, then we'll figure out Plan B," he said.

Buyouts abound

In announcing its buyout program, The News & Observer joins other newspapers that have offered similar programs in recent months.

That includes others owned by The McClatchy Co., such as the Miami Herald and Sacramento Bee, as well as papers owned by other publishing companies, including The Seattle Times Co.

"Even The New York Times is doing it," said Philip Meyer, a professor at UNC-Chapel Hill's School of Journalism and Mass Communication. "It used to be the mark of a poorly managed company, but it's not anymore."

Last week, McClatchy, based in Sacramento, Calif., reported a 15 percent drop in advertising revenue for its first quarter and predicted that second-quarter revenues would be down in the low- to-midteen-percentage range.

At The N&O, the first three months of the calendar year got successively worse, Quarles said.

With the slumping housing sector, sluggish retail sales and worried consumers, advertising revenue nationwide for print news- papers has plummeted. In 2007, that revenue fell 9.4 percent to $42.2 billion, the Newspaper Association of America said.

"I keep hoping we see the bottom," Quarles said. "It's a very ugly picture."

Still, newspapers' online audience keeps growing. The association reported that newspapers' online ad revenues jumped 19 percent in 2007 to $3.2 billion.

"There's still a strong demand for the product that we produce," Drescher said.

But the challenge is figuring out how to compete in a world where technology allows cheap, specialized communication, Meyer said. "It's important to get out of putting ink on paper," he said.

But he cautioned, "If you cut quality, you're going to lose that influence that makes the business model [of newspapers] work."