Nov. 11 (Bloomberg) -- Yell Group Plc, the U.K. Yellow Pages publisher that suspended dividend payments and renegotiated debt terms this year, will slash more jobs to trim costs and counter falling revenue as the global economy slumps.

Yell will cut another 1,300 jobs, mostly in the U.S., to save 100 million pounds ($156 million), Chief Financial Officer John Davis said in a phone interview today. The London-based company already reduced employment by 1,300 this year to save 150 million pounds, he said.

``We can plan under the assumption that things aren't getting better and hence the cost cuts today, and we are actively working to protect next year's earnings,'' Davis said. The company forecasts a 5 percent drop in revenue excluding currency swings and acquisitions in the third quarter, he said.

Media companies worldwide have cut jobs this year as advertisers pull back spending amid an economic slump. Researcher ZenithOptimedia Group Ltd. said last month worldwide advertising will rise less than forecast this year as credit market turmoil leads to cuts in the luxury goods, travel and entertainment industries.

Newspapers including the Boston Globe, Seattle Times and Los Angeles Times, as well as publisher Gannett Co. have all announced workforce reductions. Yahoo! Inc. plans to cut 10 percent of jobs and WPP Group Plc instated a hiring freeze earlier this year as headcount increased faster than revenue.

Yell shares rose 5 percent to 68.75 pence in London trading, valuing the company at 537.1 million pounds. The stock has fallen 83 percent this year.

Profit Forecast

Yell, whose lenders last month eased debt limits in exchange for a higher interest rate, reiterated today its full-year earnings before interest, taxation, depreciation and amortization will be ``broadly flat'' at constant exchange rates.

Customers probably will reduce advertising in Yell's printed directories because of the economic slump, the company said today. Print revenue fell 9.4 percent in the U.K. and 1.5 percent in the U.S. in the six months through September, while print client retention ``continues to be under increasing pressure'' in Spain, Yell said.

While the company has renegotiated borrowing terms, ``equity investors face considerable risks,'' Lornia Tilbian, an analyst at Numis Securities with a ``hold'' rating on the stock, said today. Yell's businesses in the U.K., U.S. and Spain face ``severe recession,'' she said.

Online Growth

First-half profit rose 1.7 percent to 85.2 million pounds from 83.8 million pounds a year earlier on growth in online advertising sales. Internet sales, which account for 15 percent of overall revenue, jumped 41 percent at constant exchange rates, Yell said. Total sales climbed 6 percent to 1.02 billion pounds.

Under new debt terms, the annual interest rate on Yell's loans will rise by 1 percent and the company will pay a one-off amendment fee of 0.5 percent to consenting lenders. In return, Yell will be allowed to carry higher debt relative to earnings, and a lower ratio of earnings to interest payments.

Net debt stands at 4.7 times annualized earnings on a consistent currency basis, compared with 4.9 times in March, the company said today. Davis said Yell targets 4.6 times annualized earnings by the end of the financial year.

Yell has debt of about 3.8 billion pounds, Davis said.

To contact the reporter on this story: Kristen Schweizerkschweizer1@bloomberg.net

Last Updated: November 11, 2008 12:04 EST