The News & Observer Publishing Co. on Monday announced sweeping changes to its operations triggered by cost cuts at its parent and steep declines in the industry overall.

The company, which includes community newspapers such as The Eastern Wake News and The Cary News, will cut its work force by 8 percent, or 70 people. At The N&O almost all divisions were affected. In the newsroom, 16 people will lose their jobs.

In other moves, the N&O will merge two sections and combine the staffs of three newsroom departments with departments at The Charlotte Observer, a sister publication also owned by The McClatchy Co. of Sacramento, Calif. The N&O will eliminate daily editions tailored to specific areas of the Triangle to save on production costs.

For readers, the changes will mean a thinner newspaper with more focused coverage and a scope that reaches across North Carolina. The N&O, which will still have one of the largest news-gathering operations in the state, will continue to focus on investigative journalism and stories with high interest to readers.

"Clearly, when you look at these changes and some other changes we've made, print readers are going to get less," said John Drescher, The N&O's executive editor and senior vice president for news. The paper will have fewer sections, Drescher acknowledged, but said it will create new content that he thinks readers will like. "Strategically, our goal is to maintain the quality of our print product" while offering more on The N&O's Web sites, he said.

Changes at The N&O were prompted by McClatchy, which owns 30 daily newspapers nationwide and announced 1,400 job cuts across the company on Monday. Those reductions will affect about 10 percent of McClatchy's work force and save the company about $70 million annually.

They're part of a broader effort by McClatchy to trim as much as $100 million in expenses during the next four quarters.

McClatchy has been hammered by an advertising slump that continues unabated. The company said Monday that advertising revenue, which accounts for about 85 percent of the company's total sales, fell almost 17 percent last month, compared with May 2007. That was worse than the 14.8 percent decline in April.

"The effects of the current national economic downturn ... make it essential that we move faster now to realign our work force and make our operations more efficient," Gary Pruitt, McClatchy's chief executive, said in a statement. "We're taking this action to help ensure a healthy future for our company."

Ads move to Internet

The entire newspaper industry is suffering as the advertising revenue that sustained them for generations -- particularly in the employment, auto and real estate categories -- migrates to the Internet or disappears altogether amid the economic downturn.

Across the industry print advertising sales fell a record 14 percent in the first quarter, according to figures released last week by the Newspaper Association of America. To contend with the drop in revenue, Gannett, the nation's largest newspaper publisher, froze employee pension benefits this month. Tribune, which publishes the Los Angeles Times and is owned by real estate mogul Sam Zell, is cutting jobs and slashing 500 pages a week from its newspapers.

McClatchy has felt some of the sharpest pain because it has significant exposure in Florida and California. The company gained more substantial operations in those states when it purchased Knight Ridder, a larger rival, in June 2006 at the peak of the housing bubble.

Shortly after the acquisition was completed, the bubble burst, with some of the biggest housing troubles in California and Florida. Newspapers in those states account for a third of McClatchy's advertising revenue. And in May, advertising revenue declined 23.5 percent in California and 16.7 percent in Florida.

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