On The Media had a good interview this weekend with John McIntyre, a former newspaper copy editor, and one of many who have lost their jobs recently due to budget cuts. He talks about the increase in errors and reader complaints at newspapers as a result of the layoffs.
One reason they're are among the first to go is that their work is less visible than that of, say, reporters. Another reason is that, on the Internet, readers just "don't expect things to be accurate or very well done and therefore they are used to tolerating a much higher level of shoddy work and a much greater volume of errors, and therefore you can sacrifice quality on the web and it doesn't mean that much." McIntyre points out that the work of copy editors is much more than just fixing typos, though, and has caught cases of plagiarism, falsification, and libel.
Link: Newspaper Leighoffs (On The Media)
A related article by the ombudsman at the Washington Post: Declining Editing Staff Leads to Rise in Errors.
John McIntyre's new blog: You Don't Say.