John Armstrong, publisher of the MediaNews Group papers in the East Bay including the Contra Costa Times and Oakland Tribune, has been replaced by a Mercury News circulation executive, David Rounds.

Armstrong (pictured), 65, said that his bosses “concluded that I didn’t have the skill set that really was a good fit for the company as it moves forward,” according to a report in the Contra Costa Times.

Armstrong is a 45-year veteran of the news business who came to the CC Times as editor in 1995, less than a week before Times heiress Margaret Lesher sold the paper to Knight Ridder for $360 million. He took over leadership of all East Bay operations in 2006 when MediaNews acquired the Times.

Mac Tully, publisher of the Merc and head of MediaNews Group’s Bay Area Newspaper Group, announced Armstrong’s removal in the Times’ newsroom on Monday.

Here’s the memo Tully sent to employees about the shakeup:

Dear Employees:

We’re announcing a leadership change for our East Bay newspapers. After many years of dedicated service, John Armstrong will be leaving the company effective October 17. We’re very appreciative of the effort that John has put forth during his role as Publisher, and earlier as Editor, and wish him good fortune for the future.

David Rounds, San Jose Mercury News Vice President of Circulation, will replace Armstrong as the new President and Publisher of our East Bay newspapers. David is a career newspaper professional with more than 35 years’ experience in newspaper advertising, circulation and operations. The first half of his career focused on advertising and included work at the Independent in Livermore, ANG newspapers in Pleasanton, Hayward and Fremont, where he held numerous management positions in retail and classified advertising. In 1989, he joined Lesher Communications in the East Bay working at the Valley Times, West County Times, Antioch Ledger and the Contra Costa Times in various positions including advertising manager, general manager, group Vice President, and Vice President of Circulation. David has served as Vice President of Circulation for the Mercury News since January 2005.

Dan Smith, East Bay Circulation Vice President, has been named Vice President of Circulation for the Bay Area Newspaper Group. He will now oversee all circulation efforts for the San Jose and East Bay consolidated operations. We are enthusiastic and optimistic regarding the opportunities associated with one coordinated, strategic effort to generate increased circulation sales and improve our customer retention for the BANG papers. Dan worked for the Mercury News from 1982 through 1995. He is very familiar with the market and has the benefit of having worked with a majority of the South Bay circulation team.

Michael Turpin, San Jose Advertising/Marketing Vice President, has been named Vice President of Advertising/Marketing for the Bay Area Newspaper Group. Michael will oversee all advertising and marketing efforts for the San Jose and East Bay Consolidated operations. We’re equally optimistic that a coordinated strategic effort in advertising and marketing for the BANG operations will be more effective and efficient in reaching and satisfying our advertising customers. Mike Jung, East Bay Vice President of Advertising, will report jointly to Michael Turpin and David Rounds.

Michael joined the Mercury News in 1999 as major accounts manager and later assumed the key accounts group in 2002. In 2005, Michael assumed responsibilities for all of retail advertising including overseeing the assembly of a single major accounts sales team after the MediaNews purchase of The Mercury News and Contra Costa Times. In 2007, Michael became the Vice President of Advertising for The Mercury News and earlier this year assumed responsibility for national advertising, marketing and the publishing of the Milpitas Post, Silicon Valley Community Newspapers and the Daily News Group.

While this is a challenging time in the newspaper industry, I remain convinced that we will not only survive but also thrive in the coming years. We do face immediate hardships associated with the “sea change” that is occurring in the newspaper industry coupled with a stressed economic environment. That said, the economy will eventually stabilize and newspapers will successfully navigate their way through this difficult environment.

Newspapers remain the dominate provider of local news and advertising content. It is our core competency that no other media can match. Local news and information will always be important as people want to know what is happening with the schools their children attend, the safety of their neighborhoods, the roads they drive on, the taxes that the pay, etc. So, we have a core competency that no one else really has and that people really want – the only thing that is changing is how some people want to receive that information. How we adapt our business model to best fulfill the desires of our customers is the question we must answer – and we find the answer.

The aggregate reach of our print and online customers is increasing. We reach more people today than we have in the past – we’re a growing media. Not too many of our competitors can make that claim. I’m confident that newspapers will successfully find our way through these challenging times.

Thank you for everything you have done to make our newspapers better and to get through our current challenges. Please join with me in wishing good luck and best wishes to John, David, Dan and Michael.

Mac Tully