As word of spread of Gannett’s plan to freeze its employee pension and increase 401(k) contributions, rank and file workers reacted with a mix of anger and uncertainty Thursday.
Gannett revealed that the move would save the company about $30 million in 2009.
“We have not sold it as a positive, we have sold it as a reality,” Gannett spokeswoman Tara Connell told E&P a day after the announcement came out. “It allows us to save money and improve the 401(k), which is what employees have told us they want.”
But the mood among newsroom staffers who spoke with E&P was not good. While many declined to comment at all, those who did speak up were bracing for the worst.
“Everybody was, first of all, shocked, then disgruntled to find out the pension was frozen,” said Terri Sanginiti, a 12-year reporter at The News Journal in Wilmington, Del. “That was one of the perks of the job. It just came out of left field, at the end of the day.”
Sanginiti was referring to Wednesday’s memo from Gannett CEO Craig Dubow, first revealed by E&P, that stated the pension fund would be frozen as of Aug. 1. It said that the company would save $90 million in the first year, with $60 million of that transferred to the 401(k) plan. The company would increase its matching 401(k) contribution from 50 cents worth of stock for each employee dollar to $1 of stock for each.
“The process of transforming the company has been ongoing and in that process we are looking at virtually everything we do and how we do things,” Connell said about the decision behind the change. “We look at growing the top line, but also containing expenses.”
But for some staffers, the move is a slap in the face to employees. “It is sad to see that the largest newspaper company in North America is treating its employees so shabbily,” said Lou Mleczko, president of the Newspaper Guild of Detroit, whose members include those at the Gannett-owned Detroit Free Press. “They can afford to maintain this [pension] plan, it is not an expensive plan. It is an abandonment of their own employees.”
Under its current contract, the Detroit guild is not immediately affected by the change, having a union-controlled pension plan as part of its agreement. But when that contract ends in 2010, it will likely be an issue.
“I hope it won