The Jewish Exponent, the nation's second-oldest continuously published Jewish newspaper, has laid off its local editorial and production staff and is transferring newsroom management to a Baltimore-area communications firm to cut operating costs.

The Exponent informed the 15 affected Philadelphia employees of the staff reduction Wednesday morning, said Steve Rosenberg, chief marketing officer for the Jewish Federation of Greater Philadelphia, which publishes the paper.

Mid-Atlantic Media, which publishes titles including the Baltimore Jewish Times and Washington Jewish Week, is hiringa smaller editorial team in Philadelphia at the community weekly to replace the seven displaced editorial staffers, Rosenberg said.

The move follows recent journalistic accolades at the newspaper, which is said to have thrived under the leadership of editor Lisa Hostein, who was among those dismissed Wednesday.

It shows that local, community focused media have not been spared by the economic forces that are challenging the newspaper business nationwide.

"The Exponent, like most newspapers, has been incredibly not-financially-healthy for a long time," Rosenberg said. "Shutting the Exponent was not an option, so we had to make a business decision, so we partnered with Mid-Atlantic Media."

The step was lamented by Jane Eisner, editor-in-chief of the Forward, a New York-based paper and website that covers Jewish news nationally.

"These regional papers play a very important role in binding the community and sharing community news," she said. "I can't see how this isn't a blow to Jewish community journalism."

The Exponent loses about $300,000 a year, having fallen to about 24,000 copies a week from about 80,000 in decades past, Rosenberg said.

The circulation numbers combine direct subscriptions with copies sent to members of the Jewish Federation, which has been making up the financial shortfall, he said.

The layoffs did not include 12 people in advertising sales and other business roles at the Exponent, which has been published since April 15, 1887, and is the flagship of the Jewish Publication Group, Rosenberg said. (The American Israelite in Cincinnati dates to 1854.)

Mid-Atlantic is hiring a Philadelphia-based managing editor and up to five new reporters to cover local news, he said.

The Jewish Federation's agreement with Mid-Atlantic, which also publishes regional shopping and style magazines, lets the company hire its own editorial staff, so current editors and reporters could not be retained, Rosenberg said.

"Local, niche community news is still very important, but the news media industry faces challenges," Mid-Atlantic CEO Craig Burke said in an e-mail. "We're going to make sure the paper looks and reads better than ever."

The company has offices in the Maryland suburbs of Owings Mills and Rockville, near Washington.

Although the Exponent's Philadelphia reporters will report to an out-of-town editor-in-chief who also oversees the Baltimore Jewish Times, Rosenberg said, the commitment to local Jewish news wouldn't be compromised.

"It's really important that it remain Philadelphia's paper," he said. "To the naked eye, nothing's going to change."

Some are not so sure.

"It's really hard to imagine that it can be outsourced," said Dayle Friedman, a rabbi and author in Philadelphia. "It's really hard to provide leadership for a paper if your feet are not on the ground as the editor in chief in the community."

Friedman said she had especially enjoyed the newspaper in its most recent iteration, having passed from a more conservative editorial leadership in 2009 to Hostein, who included more varied voices in the coverage.

The paper recently won awards from the state chapter of the Society of Professional Journalists and other organizations.

But those honors have offered no protection from the downsizing and consolidation that have struck the newspaper industrylast few years.

"Here you have a specialized paper that is feeling some of the same fiscal pressures as the more general newspaper," including lower circulation, reduced advertising sales, and loss of classified placements to online sites, said Todd Gitlin, a Columbia journalism professor. "The financial base shrinks, and the most ready source of economic improvement is to depopulate the newsroom."