The New York Daily News, which spent more than $20 million in the last year to revamp the newspaper in an attempt to stem severe circulation losses, is expected to announce Friday that it will cease publication of its year-old evening edition.

Several members of the newspaper staff said today that they expect to receive dismissal notices in paychecks Friday morning. Daily News executives -- both on the business and the editorial side of the publication -- will not confirm any layoffs.

Lester Bridges, vice president for marketing at the Daily News, said he would make no comment on any changes or layoffs at the newspaper. "All I can do is invite you to a press conference tomorrow morning at 10," he said.

"There's no secret about the coming purge," said one writer who expects to be fired. "No one who knows what's happening is allowed to say anything. But it's to the point where bosses are discussing openly severance pay, overtime checks and retroactive pay." Scores of News employes are expected to lose their jobs.

Several staff members said they had been encouraged to look for new jobs or told not to worry about free-lancing (writing articles for other publications), which normally requires Daily News approval.

The New York Daily News had been the largest-circulation newspaper in the nation for decades, but has been losing readers rapidly in recent years as its long-time audience, New York's blue-collar workers, fled the city for the suburbs. A decade ago the News had a circulation of more than 2 million every morning. Its circulation now is less than 1 1/2 million. The Wall Street Journal, a nationally distributed business daily, now has the largest circulation, at 1.9 million.

Last August in an attempt to appeal to a new market, the News launched an evening edition -- The Daily News Tonight -- filled with trendy articles, long features and more extensive business and finance coverage than in the morning edition. The evening paper also was pointed at New York's other tabloid, the racy Post, owned by Australian publishing magnate Rupert Murdoch.

The Tribune Co., the Chicago publisher which owns the News, spent more than $20 million to launch the evening edition as well as to beef up the morning paper. The News also is trying to revamp its Sunday edition, which has been performing worse than the weekday editions.

The News added an entire new staff for Tonight and hired Clay Felker to edit the nearly separate afternoon edition. Felker, once the owner of New York's weekly the Village Voice, fashioned New York magazine into national prominence, making it the protoype of many city magazines. Post publisher Murdoch today owns both the Voice and New York magazine.

Despite the huge capital investment and the injection of scores of new writers and editors, Tonight floundered. Its circulation apparently never reached much above 115,000, barely 20,000 more than the readership of the Night Owl edition of the morning News which Tonight replaced.

The prestigious advertisers the News wanted to attract -- like Bloomingdale's -- still looked to the New York Times for the most part. Both circulation and advertising at the morning Times have risen in the last 12 months.

Early this year the News cut back on the special sections that were the hallmark of the Daily News Tonight and shortened articles. It moved its press run back to 1:30 p.m. from 3:30 p.m. in an attempt to get papers to boroughs other than Manhattan. Still Tonight sales barely budged.

In June Felker announced he would leave. Last month Tonight jazzed up its front page, adding a red streak across its nameplate and bigger, more titillating headlines. All, apparently, to no avail. Despite consistent denials from News and Tribune officials, the newspaper has contemplated abandoning the Tonight edition for several months.

Afternoon papers have had severe problems in major metropolitan areas for decades as reading habits have changed. The Washington Star, once the most prestigious paper in the nation's capital, folded last Friday despite an $85 million investment by Time Inc. over the last three years. The Philadelphia Bulletin said it will close its doors this Sunday unless it gets millions of dollars of concessions from its unions.

Even the afternoon New York Post, which has been gaining readers, has seen its readership growth in the early morning press run it launched last year to pre-empt the News move into the afternoon. The Post continues to lose money because advertisers shy away from its steamy, "scare-headline" editorial content. But in the last year, Murdoch's publication had a circulation increase of 78,000 a day to 732,000.