People walk past a self-service newspaper booth in Nanjing, capital of East China's Jiangsu province on Sept 12, 2013. [Photo/CFP]

A major newspaper in Southwest China's Chongqing municipality has encouraged its employees to start their own businesses, a move that is seen as a potential layoff of its workers as an increasing number of newspapers in the country lose ground in the digital age.

In an announcement made Tuesday, the Chongqing Daily Group said all of its employees are welcomed to create start-ups in the fields of media convergence and the Internet.

Workers who are interested in the program need to first sign a three-year contract with the company, during which their pay will be suspended but positions and ranks retained and the company vowed to offer support in publicity and finance to the start-ups that are evaluated as potential.

The Chongqing Daily Group has over 6,000 employees and made a profit of 200 million yuan ($32 million) in 2014.

But the program, hotly discussed on China's social media Weibo and WeChat, is viewed by many as a possible layoff plan.

"Encouraging its employees to start business is the last option other than a massive layoff for the newspaper, which it has been forced to do for its survival," a WeChat user named Lexiangshancheng said. "I'm afraid more newspapers are to follow in the footsteps."

Huqianzhuanshi, a Weibo user, said the Chongqing Daily's news is a clear message that "the print media is about to totally give way to the Internet."

Tsinghua University issued a research report earlier this month that the print advertising saw a 15 percent decline in 2014 as more big advertisers are drawn to the Internet.

The Guangdong-based Southern Newspaper Group, a leading company in China's print media, saw a 37 percent drop of profit in 2014 while the Dazhong Newspaper group in East China's Shandong reported a 56 percent decline of profit in the same year.

The report, compiled by the university's school of journalism and communication, said the decline may continue through 2015 amid the flagging economy.

However, the media industry for the first time generated more than one trillion yuan ($161 billion) in revenue in 2014 thanks to the expansion of Internet-based services.

Internet-based media triumphed over traditional media in 2014, the report said, adding ad revenue generated through the Internet, which reached more than 150 billion yuan in 2014, surpassing that of TV.

Some newspapers have already closed down in the tough environment. In January last year, the 15-year-old Shanghai Evening Post shut down and a Beijing-based weekly newspaper called The First also declared termination from April 25, 2014.

Some people have been moaning over the demise of traditional newspapers, saying it's an inevitable trend as technology renders newspapers obsolete although others are more optimistic, according to a report by China News Service.

China's Media expert Xu Shengguo said the demise of a few newspapers doesn't mean the death of print news, as the demand for news never diminishes.

What traditional media should do, Xu said, is to keep focusing on providing quality content while proactively adjusting to readers' changing habits.

Internet expert Fang Xingdong said traditional media could collaborate with Internet companies to explore new business models.

What nearly everyone agreed on is that traditional media must either adapt, or die, the report said.