Tuesday, January 4, 2011

Non-Union Workers in Gannett Unit Must Take One-Week Furlough in First Quarter

Gannett Co. told non-union workers of its U.S. Community Publishing Unit today that they will have to take a week off without pay in the first quarter of this year to avoid more layoffs as revenue continues to fall.

The furloughs will affect workers at the 81 community newspapers. They will not apply to Gannett's flagship newspaper, USA Today, or to the Detroit Free Press. There are a total of 17,000 employees working at the community newspapers.

In a memo issued earlier today and posted on Jim Hopkins' Gannett Blog, unit President Robert Dickey said that top line revenues "remain short of where they were a year ago." Dickey continued to say that the current economy made it necessary to implement the furloughs.

"This was, quite frankly, an option I had hoped we could avoid," he said in his memo.

The furloughs must be taken by March 27, and will include Dickey himself, the memo said. Gannett chief executive officer Craig Dubow and chief operating officer Gracia Martore will have their salaries reduced by a percentage equivalent to a week's furlough.

Russell Adams of The Wall Street Journal writes:

Like many other newspaper publishers, Gannett has slashed jobs and made many other cuts, including furloughs, in response to steep declines in advertising revenue over the past couple years. The company had about 35,000 employees at the end of 2009, down from nearly 50,000 three years earlier.

In the third quarter of last year, Gannett posted a 38% increase in profit helped by lower operating expenses. However, its newspaper business continued to drag down results. Publishing ad revenue fell 5.1% from a year earlier, a slight improvement over the 5.7% decline in the second quarter. Publishing ad revenue declined 28% in 2009.

"As we start the new year, we continue to see some improvement in revenue trends and reduced year-over-year revenue declines in U.S. Community Publishing," Mr. Dickey wrote. "This is no small accomplishment and I think you should take great pride in what you have achieved. Our top line revenues, however, while improving, remain short of where they were a year ago. This is compounded by a still challenging and uncertain economy, as well as increasing expenses."

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