L.A. Times tries shifting some graphics operations to India.

Graphic artists in India last week began designing classified ads for the Orange County editions of the Los Angeles Times and Recycler Classifieds, the start of a 13-week pilot program that outsources graphic design for the papers.

The move comes as the Times is trying to cut costs and increase revenues.

Tribune Co.--which owns 26 television stations and 11 urban U.S. dailies including the Times, Newsday and the Chicago Tribune--posted first-quarter 2006 operating revenue of $1.3 billion, down 1 percent, or $17 million from the same period last year. The declines came from a continued drop in national and retail advertising, which offset a nearly 30 percent increase in classified and interactive advertising revenue.

Chicago-based Affinity Express Inc. submitted a bid for the work several months ago, said Kelly Glass, Affinity's vice president of marketing. The work will be handled by the company's subsidiary in Pune, India.

Times representatives declined to comment on the number of bids received and selection process. Asked if the Times would consider expanding the program at the conclusion of a successful test run, spokesman David Garcia said via e-mail that the paper "will not discuss specific options that may or may not be under consideration."

"I don't know to what degree they'd want to expand (the program), but I know they are looking at cost savings and want to free up their artists for more time-sensitive work," Glass said

Affinity already counts catalog-based clothing retailer Lands End Inc., Ikon Office Solutions Inc., Xerox Corp and FedEx Kinko's Office and Print Services Inc. among the customers that use its Indian operation. Affinity first established its India-based subsidiary in 1993 and has about 2,000 clients that use its design, artwork and document creation services. The company has around 550 employees in India, and announced last fall that it would spend about $1 million to add 1,000 employees to the subsidiary, Affinity Express India, over the next year.

"Our customers have been thrilled," Glass said. "It comes down to taking the portions of the work that make sense to outsource."

The Times will have a dedicated team in India for its advertising work, Glass said, though she did not know the size of the group.

The Times released a statement on the pilot program that read in part:

"Ad production is a high-turnover operation and our intention is to implement this strategy over several months and without layoffs."

Garcia was careful to point out that it is the work, not the jobs, that are being replaced, and the move was in part to stem the high turnover rate among ad production employees, which he estimated at about 20 percent.

"The pilot program vendor has the stable talent pool necessary to provide dependable creative production," Garcia wrote. Presently, graphic artists in the classified ad department spend about 75 percent of their time supporting ad production and revisions, he said.

Still, if the pilot were successful, about 40 to 50 Times ad production employees and another 10 to 20 Recycler workers would be replaced. Somewhere between 10 and 18 of the employees are expected to transfer to new positions at the Times or Recycler.

ANNE RILEY-KATZ

Staff Reporter