DENVER -- The Denver Newspaper Agency says it plans to lay off about 200 people representing 17 percent of its payroll dollars in the next several weeks, now that the Rocky Mountain News has closed.

The agency handled business operations for the News and The Denver Post under a joint operating agreement, but the News stopped publishing last month.

The first 40 employees to be laid off were told Friday, agency spokesman Jim Nolan said. The agency will have about 850 full-time employees once all layoffs are done, he said.

The latest cuts are across all departments, including non-union and union employees. The cuts don't affect The Post newsroom, which lost six managers to layoffs.

"This is a painful but necessary action to shore up the health of our company at a time when our industry is rapidly changing," said Gerald Grilly, president and chief executive officer of the agency.

The story about the layoffs were first reported online by InDenverTimes.com, a site staffed by former Rocky Mountain News reporters. InDenverTimes reported that officials with the Denver Newspaper Guild were notified Friday that 33 positions at the agency would be eliminated but were surprised by the larger figure.

”We were aware there would be workforce reductions, but not to the magnitude that you’re describing," Tony Mulligan, administrative officer with the guild, told the site.

Media companies industrywide have struggled to boost sliding advertising revenue in a weak economy and with competition from the Internet for readers and advertisers.

Grilly said cuts might have gone deeper if not for $18 million in wage and benefit concessions negotiated with unions earlier. Unions also agreed to $2 million in concessions for Post editorial employees.

Grilly said the cost cuts will help shape a new business model and allow the agency to adapt.

"We're not just ink on paper anymore. We are true info providers across many platforms. The new shape of our industry demands that we work leaner and smarter to serve our customers," he said.