Unionized employees at the New York Times Co flagship newspaper and its digital unit ratified a deal on Monday to cut pay by 5 percent, according to a memo obtained by Reuters.

A reduction in pay of 1,300 employees is set to start on Tuesday and employees will be given an additional 10 paid days leave per year.

The pay reduction is expected to save $4.5 million.

In exchange for the reduction in pay, New York Guild proposed that there be no lay-offs during the period, a request that NY Times Co. rejected.

Because our members know these are extraordinarily tough times for the news business, they were willing to pitch in to help the company cut costs without layoffs, New York Guild President Bill O'Meara said in the memo, Reuters reported.