Newspaper chain Gannett Co. announced Monday that it plans to cut 2 percent of its workforce, sending shivers down the spines of journalists in newsrooms across the country.
Lukas Alpert of The Wall Street Journal had the news:
The layoffs may affect about 380 employees across the company. Over all, Gannett employs close to 19,000 people, about 4,000 of whom are journalists.
Gannett president and chief executive, Bob Dickey, said in the memo that the company would continue to pursue acquisitions, which he said were key to the publisher’s future. Gannett, which owns USA Today and over 100 other American newspapers, has been on an aggressive buying spree since being spun off 19 months ago from television assets now known as Tegna Inc.
“These moves are central to our transformation into a leading, next-generation media company,” Mr. Dickey wrote. “The positive impact of these efforts will take time, which in the near-term requires us to assertively manage our costs.”
The newspaper industry has been suffering an accelerating drop in print advertising revenue this year, which has forced many publishers to seek significant cost cuts and make efforts to shift resources to more digitally-focused areas. Global spending on newspaper print ads is expected to decline 8.7% in 2016, according to estimates by ad-buying firm GroupM, the largest drop since 2009.
Michael Neibauer of The Washington Business Journal noted cuts will also affect its headquarters in McLean, Virginia:
Gannett did not return a request for comment.
“We will all feel the loss of great colleagues,” Dickey wrote. “Each and every one of you has my deep gratitude for your many contributions to the success of our company. Actions like these are difficult, but I remain steadfastly committed to reinvesting in our employees and the capabilities required to sustain and grow our company so that we may continue to serve our customers with excellence.”
According to a report in USA Today, Gannett’s national digital advertising rose 22.4 percent, “but similar to other companies with a legacy steeped in newspaper publishing, digital revenue and traffic haven’t risen fast enough to offset weaknesses in print.”
Gannett is headquartered at 7950 Jones Branch Drive, a building it currently shares with its former parent, the broadcasting company now known as Tegna (which will relocate to The Boro in Tysons in 2019). Gannett is the print division spin-off.
Brian Flood of The Wrap notes that the cuts come as its bid for rival newspaper chain Tronc nears:
Dickey wrote in the memo, obtained by Politico, that the decision is “required” and not taken lightly. Action will be completed by the end of the week and affected employees will be notified by the end of the day on Tuesday. The headcount reduction should impact more than 350 employees.
Meanwhile, Politico’s Ken Doctor reports that Gannett’s long-awaited takeover of Tronc could become official in the near future, as Gannett’s third-quarter earnings call is scheduled for Oct. 27 and Doctor notes that financial analysts will expect CEO Bob Dickey to “answer the Tronc question with a yes or no.”
Gannett did not immediately respond to TheWrap’s request for comment.
“We will all feel the loss of great colleagues,” Dickey wrote. “Each and every one of you has my deep gratitude for your many contributions to the success of our company. Actions like these are difficult, but I remain steadfastly committed to reinvesting in our employees and the capabilities required to sustain and grow our company so that we may continue to serve our customers with excellence.”
Dickey continued: “Over the next 18 months, we will continue to build our scale and invest in important digital capabilities and experiences.”
