Hit by sharp drops in advertising revenue and the need to reduce operating expenses, The New Mexican on Wednesday announced plans for companywide layoffs.

The paper plans to eliminate 16.5 jobs through cuts to be announced Friday, though some of those positions have already been cut through resignations, positions that will remain unfilled. The goal is to reach a staffing level of 214 full-time workers, down from 230.5 in July 2007.

Associate publisher Ginny Sohn said about 60 percent of the cuts — or 10 positions — would come from the newsroom. Five newsroom workers are expected to receive layoff notices Friday. The balance of the eliminated newsroom positions are currently unfilled. Overall, the cuts will leave the newsroom with 55 full-time positions.

At a somber meeting Wednesday afternoon, concerned staffers listened intently to management's plans, with several wondering if the layoffs wouldn't hurt the newspaper.

Each laid-off full-time employee will receive a severance package based on years of service. In addition, for those with health insurance, The New Mexican will offer help with the transition to new coverage. Laid-off workers will be offered job counseling and placement services.

"Like most newspapers, The New Mexican is feeling the effects of the national economy and the local economy," Sohn said in a memo to staff. "Real estate brokers, builders, car dealers and other retailers have always been good and loyal advertising customers, and sales are down for many of them."

In her comments at the staff meeting, Sohn said Sunday real-estate advertising, which used to bring in thousands of dollars every month, has dropped precipitously and is now only a remnant of what it used to be

Sohn added The New Mexican has taken numerous steps to cut costs, including reducing the number of pages, discontinuing zoned editions, trimming support positions, selling delivery vehicles and reducing freelance spending.

She noted, however, that "more cost cutting is necessary."

In his memo to newsroom staff, managing editor Rob Dean said, "I don't have to list for you the several economic forces and advertising trends that have cut into newspaper revenue in general and The New Mexican's revenue in particular. ... We simply have fewer resources, so we must pull back and regroup."

Dean said The New Mexican will not share financial information with the public, but "we can say the goal is to reduce expenses through the rest of 2008 to offset losses in revenue. We will achieve that mostly by not filling open positions. ... We want to keep the layoff as small as possible."

Despite the bad news, "our readership remains strong," Sohn said in her memo, "as does overall local retail advertising. Every day more than 90,000 people — about 70 percent of the Santa Fe area — read The New Mexican in print or online."

The newspaper's priority, she said, "continues to be to provide all the local news and information to our community so that our citizens can make better decisions about their city and their lives."

Toward that end, "The New Mexican's priority is also to retain as many reporters, sales account executives and customer-service representatives from classified, circulation and accounting as possible — in other words, the employees who gather the news and serve readers and advertisers."

The New Mexican's last force reduction of about the same size took place in 1989, when 11 full-time and four part-time employees were laid off. At that time, the newspaper was owned by Gannett Corp.

Across the country, newspapers have been cutting their staffs because of the weak economy and falling revenues. The New York Times, Boston Herald, Baltimore Sun, Wall Street Journal, Hartford Courant and Atlanta-Journal Constitution have all seen cuts.

The Tribune Cos., which owns the Chicago Tribune and Los Angeles Times, plans to cut up to 500 jobs at its newspapers, according to the Web site Newspaper Death Watch.

Contact Bob Quick at 986-3011 or bobquick@sfnewmexican.com.