Gawker reported this morning that the Onion is killing its San Francisco and Los Angeles editions, effective today.

The staff of those bureaus will lose their jobs. A spokeswoman wouldn’t confirm how many people were affected, but it’s fairly common knowledge that the Onions are run leanly, so we’re probably talking closer to 10 people than 50-100 here. Still, for those people who now find themselves jobless, it’s not any fun.

Also, despite rumors that the Washington, DC and Austin, TX editions are also struggling, the spokeswoman assured us that “we’re fine” outside the West Coast.

We obtained the memo sent by CEO Steve Hannah to all staff today, wherein we learn the motivation for killing the West Coast editions (“advertising in both cities has been abysmal”) and the media company’s plans for the future (investing in Onion News Network, publishing books, merch). And you get to see the phrase “blogospheric bullshit” used in a sentence.

May 5, 2009

To: Onion Nation
From: Steve Hannah
Re: Low Talk and the Actual Truth

As most of you have heard through the very twisted grapevine by now, we have decided to shut down our print operations in San Francisco and Los Angeles. Both staffs were informed in person yesterday that their last editions would be published this week. It is an unpleasant task to discontinue print in those two cities—and to lay off the good people who worked hard to make them profitable—but I believe it is the wise business decision to make.

At the quarterly Board meeting in Chicago two weeks ago, we took a hard look at the company’s business operations in this very tough economic environment. Overall, we are weathering the storm, and, as you know, we have avoided taking many of the draconian measures employed by other media companies. Unfortunately, despite healthy readership in both Los Angeles and San Francisco (readership has actually risen despite our reduction in copies in recent months) the advertising in both cities has been abysmal.

This stands in stark contrast to other parts of our business—both the majority of our print markets (Milwaukee, Madison, Minneapolis, Denver, Boulder, for example) as well as our rapidly growing digital enterprises (theonion.com, avclub.com, the Onion News Network and Decider.com—which are growing nicely and in some cases dramatically. So, at the end of the day, you have to make a decision whether to pump money into parts of the company that are straining us financially (LA and SF print) or reroute that capital into the areas of the company that are growing in size and value.

We chose the latter.

We love our print publications. They are the foundation of the Onion and, in the majority of our markets, they make us money. We have no plans at this time to cease publication in any of our other markets. Quite the contrary, the reason we moved Carrie Palmer—one of our most successful city managers (Denver/Boulder)—to Chicago this month was to lend an experienced hand to some of our less experienced cities. We need to do better in our flagship markets in New York and Chicago as well, and we need to take things up a notch in Austin. But we have confidence that all that can happen.

Look—as Obama likes to start his sentences—our multiple brands have never been bigger. The Onion.com is still basking in the glory of our “War for the White House” coverage. ONN has driven our traffic through the roof. (In April 2007 when we launched ONN we had around 2.5 million uniques. Last year we averaged 6.5 million uniques monthly, and in the first quarter of this year we were averaging a monthly unique audience of 8 million.) In the same period of time, the AV Club has more than doubled its traffic and, in 2008, our AV site averaged more than 75,000 comments per month. That’s huge.

(NEWS FLASH: Along with the Peabody award last month, this morning we won more Webbys. Stay tuned for details.)

Let me give it to you straight: We began life as a traditional publishing company, and, while we still do just fine in many of our print markets, we have been transformed into a digital enterprise. The opportunities that come our way (each and every week) as a digital operation are overwhelming. They are the logical extension of our roots.

I read a bunch of the miscellaneous, blogospheric bullshit that ran on the web last night. As usual, it makes me embarrassed to have spent 18 years as a journalist: the stuff is speculative, stupid, inaccurate, sourced by people who know next to nothing about our company and can’t pick up a telephone to call, dumb, irresponsible and, more than a little malicious. Other than that it’s all good and highly responsible.

So, buck up boys and girls. The opportunities at the Onion have never been better—or more expansive. They are coming at us faster than ever.

Times change. You either change with them or get out of the way. We’ve decided to change with then. No, rather, change and take advantage of them.

So here’s what we’re doing:

We continue to invest in ONN because it’s great, of course, and because it’s capable of attracting (it already has!!!) a new audience. We are also hunting for new studio space to expand our opportunities for video production. Also, we want to reunite our scattered New York offices and hope to do so by the end of this year.

We spent part of yesterday meeting with people here in LA who are very interested in taking AV into the video realm.

We have three AV/Onion books scheduled for publication before the end of the year.

Meanwhile, we’re exploring all manner of new business development partnerships. In short, we’ve developed a strategy to fund production of expanded content in other ways than advertising dollars. We’ve never had more opportunities than we’ve had today. In some ways, however, they are simply different. Embrace them.

We have increased the size of our editorial (Onion, ONN, AV and Decider) teams and restructured our graphic/production teams to accommodate significant traffic growth. Our plan is to continue to invest more in content. It is the center of gravity of our company.

We have solid plans to grow our online store and general merchandise sales as well. We have an important meeting on May 13 in New York to get it going.

I’ll have more to say about all that later.

Now I am going to catch a plane.