UPDATE 1-New York Times, guild in tentative pay cut deal-memo

* Union says layoffs still possible

* NYT union members would take 5 pct pay cut this year

* Shares down 3.69 percent

By Robert MacMillan

NEW YORK, April 28 (Reuters) - The New York Times Co (NYT.N) reached a tentative agreement with the Newspaper Guild of New York on Tuesday to cut union worker pay at its namesake newspaper by 5 percent to save $4.5 million, according to a memo obtained by Reuters.

Under the agreement, which union members still must ratify for it to take effect, workers would get reduced pay through the end of the year.

Non-union employees at the Times newspaper and other New York Times Co properties had their pay cut earlier this month.

The Times's management rebuffed a Guild proposal to guarantee that there would be no layoffs during the period that the pay cut was in effect.

"Our agreement achieves most of the safeguards we wanted," New York Guild President Bill O'Meara said in a statement. "But it will not erase the possibility of job cuts ... even though management tried to sell us their proposal as a way of avoiding layoffs."

The Times announced the cost cuts in March, along with 100 layoffs, as part of an effort to save money as it faces declining advertising revenue and hundreds of millions of dollars in debt. At the time, executives said the pay cuts would help avert as many as 80 job cuts.

A Times spokeswoman was not available for comment.

The company also may shut down the money-losing Boston Globe, which it said could lose $85 million this year. It is seeking concessions from Globe unions to save $20 million.

The Times Co is also trying to sell its stake in New England Sports Ventures, the holding company that owns the Boston Red Sox professional baseball team.

Separately on Tuesday, a source familiar with the matter told Reuters that hedge fund manager John Henry was looking at taking control of the Globe as part of a deal to buy the Times Co's stake in New England Sports Ventures. [ID:nN28546075]

New York Times shares were down 17 cents, or 3.3 percent, at $4.98 on the New York Stock Exchange. (Reporting by Robert MacMillan; Editing by Toni Reinhold)