BOSTON -- Members of the Boston Globe's largest employees union forced a showdown with the owners of New England's largest newspaper as they narrowly rejected a contract the New York Times Co. said was necessary to keep the newspaper operating.

The Boston Newspaper Guild rejected the contract negotiated after the Times Co., said it needed $20 million in annual savings from Globe unions -- half of that from the Guild -- to avoid shutting down the 137-year-old newspaper.

The vote was 277 "no" to 265 "yes," the union reported on its Web site.

The Times Co. said would impose a 23 percent wage cut effective next week on the Guild's members.

"This will secure the $10 million in costs savings needed from the Guild and will allow the Globe to reach the targeted $20 million in savings needed from all our major unions," spokesman Bob Powers said.

Turnout was high. About 80 percent of the Guild's members voted, but in the end the vote came down to 12 slim votes.

"How do you justify a 23 percent pay cut for your employees when your managers and supervisors take a 5 percent cut? How do you justify that?" Globe reporter Brian Mooney said.

"I cannot afford a 23 percent pay cut. I know the vast majority of my colleagues can't," Globe reporter Marcella Bombardieri said.

"The New York Times Company must do better than the offer that was presented," said Dan Totten, union president. "The Boston Newspaper Guild is committed to resuming good-faith negotiations with the New York Times Company and Globe management to reach an agreement."

"I don't think the two sides are that far apart. I think that, you know, people in our union just felt like we needed a little bit more money in our paycheck to take the edge off. It is such an extreme reduction in our pay and benefits," Bombardieri said.

The newspaper and its largest union appear to be headed into a nasty labor dispute which may shift the contract dispute to the federal courts and the National Labor Relations Board.

"We regret having to take this action, but have no financially viable alternative," Powers said.

Under the proposed contract, members of the Guild -- about 700 editorial, advertising and business employees -- would have seen an 8.3 percent wage cut, five-day unpaid furloughs and cuts in health care benefits, 401(k) contributions and pensions.

The contract also would have eliminated lifetime job guarantees for 190 Guild workers.

The Guild is the only one of the Globe's major unions to reject concessions.

The pay cut will take effect next week, management said. The Globe said the newspaper would be willing to meet with the union this week to review implementation of the cut.