NEW YORK, NY (October 28, 2008) – Reacting to a second consecutive quarter of huge revenue losses, Gannett newspaper division chief Robert J. Dickey sent out a memo today disclosing mass involuntary layoffs, 10 percent of the company or about 3,000 workers, before Christmas.
A Gannett spokeswoman told Bloomberg News that the cutbacks do not apply to employees working at the company's flagship paper, USA Today.
Gannett's third quarter earnings dove 32 percent, and its advertising revenue continued to decline, the company reported at the end of last week.
For this third quarter Gannett reported net income of $158 million on revenue of $1.64 billion, down $234 million from this time a year ago. Gannett said revenue exceeed the $1.61 billion forecast by financial and newspaper analysts, but it was still 9 percent lower than 2007. Newspaper advertising revenue was down 18 percent from last year's third quarter, and USA Today's advertising sales fell 7.1 percent in the third quarter compared to last year's same time period.
This surprise new round of cuts comes on the heels of 1,000 jobs being eliminated in August in Gannett's Community Publishing division. The 1,000 jobs were only 3 percent of that unit's employees.
USA Today and Gannett's other 84 daily newspapers account for 80 percent of the company's revenue, Gannett said, and 65 percent of its 46,000 employees. USA Today and Gannett's Arizona Republic are the company's largest employers.
In Des Moines, Gannett employees at the Des Moines Register learned of the layoff plans in a memo from Register publisher Laura Hollingsworth today, but she said she was unable to determine yet "what that will mean in terms of numbers of layoffs."
Other Gannett divisions are anticipating layoffs before the end of the year too, based on the company's earnings projections.
A memo sent to all Gannett newspaper general managers and publishers from Dickey said:
"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."
