Another round of furloughs for Gannett newspaper employees


Gannett Company, the world’s largest newspaper chain, continues to cut costs to keep the newspaper side of the company profitable. The Gannett Blog, run by a former staffer, reports that employees of the US Community Publishing (USCP) newspaper division have received notices that the 5th round of mandatory unpaid furloughs will take place in Q1 of 2012.

The one-week furlough for non-union employees also applies to the Gannett Publishing Services (GPS) operation. In all, the Gannett Blog says the two units employ more than 20,000 of Gannett’s 30,000 worldwide workers. They do not include the Gannett Broadcasting operation in the US.

The memo to staffers from US CP President Bob Dickey and GPS President Evan Ray explained the economic reality:

“We need to continue managing costs and lowering expenses to align with revenue and invest in future growth opportunities. While USCP has been successful in finding new digital opportunities and building digital revenue — which has been one of our primary goals — this growth has not offset lagging revenue from some of our more traditional USCP advertisers. Those advertisers remain good, loyal customers of ours but their businesses are under pressure because of the economy and they have continued to reduce their spending.”

So, another round of furloughs, the 5th in three years, is being instituted. Employees below a certain salary level, which was not spelled out, are exempt. Union workers are being asked to voluntarily participate.

The Gannett Blog spelled out how the previous four rounds of furloughs saved the company $67 million. It also spelled out the bonuses paid to top executives and the $37.1 million in severance and disability benefits to former CEO Craig Dubow as he resigned for health reasons in October.

RBR-TVBR observation: The Gannett Blog has long complained about the paychecks to top executives, as though the money was coming out of the pockets of lower-ranking employees. Business doesn’t work that way. Each operating unit, right down to the individual TV station or newspaper, has to be analyzed as to whether it is producing the cash flow it needs to in order to justify its existence. The reality is that the local newspaper business is still in decline, so the only choices available are furloughs or layoffs.