Gannett to Trim 10% of Local Paper Jobs

Gannett Co., the nation’s largest newspaper publisher, said Tuesday it will lay off another 10 percent of the work force in its local newspapers division as advertising revenue continues to plummet during the economic downturn.

The latest reductions, to come by early December, follow a 3 percent cut announced in August. Neither round affects USA Today.

Gannett isn’t revealing a specific number, but said all would be involuntary. Some 600 of the 1,000 cuts in the first round were achieved through layoffs.

Newspaper companies including Gannett are seeing ad revenue declines accelerate as the weak economy puts additional pressure on an ad market already suffering from a migration of readers to the Internet.

Gannett said Friday that advertising revenue at its publishing business fell nearly 18 percent during the July-September quarter compared with the same period last year.

“As all of you are painfully aware, the fiscal crisis is deepening and the economy is getting worse,” Robert J. Dickey, president of Gannett’s U.S. Community Publishing division, said in a memo obtained by The Associated Press. “Gannett’s revenues continue to be severely impacted by this downturn, and our local operations are suffering.”

Gannett had said Friday it was considering more cuts by year’s end. The layoffs announced Tuesday are part of that; other divisions are likely to see job cuts, too.

Besides the general cuts at local Gannett newspapers, which include The Arizona Republic and the Detroit Free Press, the company in September eliminated 100 management jobs as it consolidated circulation, finance and other operations into four regional groups.

The company also offered voluntary buyouts to about 30 corporate employees last week, on top of reductions of about 45 positions in that division since 2007.

USA Today cut 45 jobs last November.

Publishers of individual newspapers were asked Tuesday to develop local job reduction plans by mid-November to achieve the 10 percent division-wide cut.

“Decisions will be made locally because each of our markets is unique, with differing market conditions and individual needs in light of our previous reductions,” Dickey wrote.

Employees who are laid off will be offered as much as 26 weeks of severance pay — one week for each year of service.

“While this is more bad news, it is a sign of Gannett’s determination to remain healthy and viable as a company during these turbulent economic times,” Dickey said.

Despite the sharp reduction in ad revenue and the need to cut costs, analysts consider Gannett stronger than many of its peers.

Citi Investment Research analyst Catriona Fallon initiated coverage on three newspaper publishers late Monday and assigned only Gannett a “Buy” rating. Fallon placed a “Sell” rating on The New York Times Co. and The McClatchy Co.

Gannett shares have lost more than 75 percent during the past 52 weeks. Fallon said the company’s broadcast segment, which saw some gains from the Olympics and political advertising, also provides some downside protection to the investment.

Shares in Gannett rose $1.09, or 11.9 percent, to end at $10.22.

EARLIER REPORTED BY E&P:

According to memo from Bob Dickey, the president of the newspaper division, each publisher is responsible for coming up with their own plan to meet goals.

The memo was first published on Gannett Blog run by former employee Jim Hopkins. Gannett’s Tara Connell confirmed the cuts to E&P.

Gannett reported last week that advertising revenue at its U.S. newspaper division dropped 14.9 percent in Q3.

Below is a memo to Gannett publishers and general managers from Dickey.

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To: USCP Publishers & General Managers

As all of you are painfully aware, the fiscal crisis is deepening and the economy is getting worse. Gannett’s revenues continue to be severely impacted by this downturn, and our local operations are suffering. While we are doing our best to reduce all non staff-related expenses, I am sorry to report that we must do another round of layoffs across our division.

To that end, we will institute an involuntary staff reduction of approximately 10% by the first week of December. The terms of the severance will be one week for each year of service with a cap of 26 weeks.

Each publisher is responsible for developing their local plan to achieve the expected goal. Decisions will be made locally because each of our markets is unique, with differing market conditions and individual needs in light of our previous reductions.

I have asked that all plans be completed by Nov. 14 at which time they will go through the standard review process.

I fully understand this announcement will cause you concern but I felt that once a decision was made it should be communicated as quickly as possible.

While this is more bad news, it is a sign of Gannett’s determination to remain healthy and viable as a company during these turbulent economic times. We continue to be a leader in our industry, not only because of our fiscal strength but also because we have a plan to aggressively grow the company when the economy returns.

To that end, I encourage you to contact me with your thoughts and ideas. We need to grow revenue as well as continue to find efficiencies. I would appreciate your help and ideas on both fronts.

My e-mail address is [REDACTED]. I promise you will be heard and receive a timely response.

I appreciate your understanding and commitment during these challenging times.

Thank you.