The Project for Excellence in Journalism came out with its new annual report, “The State of the News Media 2008,” this week. It paints a bleak picture of the newspaper industry, especially — though bleaker for large metro dailies than small papers. It’s a must-read for anyone in the news business (and not just newspaper folks).

The report contained a rather blunt tip: “As one prominent Midwestern editor told PEJ bluntly: ‘For the price of two senior people, who weren’t willing to learn new skills, I can hire three or maybe four young people who can do more new technology where I really need them.’”

Yes, that is harsh. But the reality is that in these challenging times for news organizations, publishers can’t afford to keep on people unwilling or unable to learn new digital skills. Future growth is dependent on making the transition to profiting from digital media. Such draconian personnel choices may be a necessary evil.