Feb. 14 (Bloomberg) -- New York Times Co., caught between shareholders who want improved returns and competition from Rupert Murdoch's Wall Street Journal, will cut 100 newsroom jobs at its flagship newspaper.

Executive Editor Bill Keller told the staff today of the cuts, spokeswoman Catherine Mathis said in an interview. They represent 7.5 percent of the Times' 1,332 newsroom employees.

Shareholders are demanding changes to the board and want Chairman Arthur Sulzberger Jr. to push online sales to counter declines in advertising and lift the stock price. Harbinger Capital Partners and Firebrand Partners, hedge funds owning almost 10 percent of the stock, proposed four new directors last month. News Corp. Chairman Murdoch has taken aim at the New York Times after buying Dow Jones & Co. in December.

``This is a reflection of the tremendous pressure over the past few years on newspaper advertising and circulation,'' said Hal Vogel, a media analyst in New York. ``My concern is that cuts could impact the product's quality, and that would only make matters worse.''

New York Times, the third-largest U.S. newspaper publisher, rose 86 cents, or 4.8 percent, to $18.84 at 4 p.m. in New York Stock Exchange composite trading. The New York-based company has lost 27 percent in the past year.

The newspaper's editorial staff is its highest ever, Mathis said. She said the company hasn't decided when it will make the cuts.

Tribune, Los Angeles Times

The news came a day after Tribune Co. said it will eliminate as many as 150 positions at the Los Angeles Times and an additional 100 at the Chicago Tribune Media Group.

New York Times reported profit and revenue in the fourth quarter that missed analysts' estimates after ad sales fell 12 percent in December.

Newspaper publishers have been cutting staff and other costs as advertisers and readers turn to the Internet, cable-TV and digital devices. Lower holiday advertising spending exacerbated an industry drop in ad sales in the fourth quarter.

Advertising revenue at New York Times last quarter dropped 4.1 percent, excluding an extra week in 2006. Gannett Co., the largest U.S. newspaper publisher, McClatchy Co., Belo Corp. and Journal Communications Inc. reported lower ad sales for the period.

Times editorial positions will be eliminated through buyouts and attrition, Mathis said, although firings are possible. The company's Boston Globe bought out 24 employees in March, said newspaper spokesman Robert Powers.

To contact the reporter on this story: Leon Lazaroff in New York at llazaroff@bloomberg.net.

Last Updated: February 14, 2008 16:53 EST