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Wednesday, October 12, 2022

Gannett slashes more personnel costs: unpaid leave; freeze of 401(k) matches and most hiring; optional unpaid time off

The nation's largest newspaper publisher, its stock down 70 percent since Jan. 1, imposed big cuts Wednesday, including unpaid employee leave in December and suspension of 401(k) contributions.

In a memo to employees, Gannett Co. CEO Mike Reed cited the “deteriorating macroeconomic environment” and said it would also freeze hiring except for positions deemed crucial and offer employees shorter hours and unpaid sabbaticals of up to six months. It did not mention layoffs.

“In order to sustain the mission of our company to empower communities to thrive, sustain local journalism and support small businesses with digital solutions, we need to ensure our balance sheet remains strong,” Reed wrote in the memo, quoted by The New York Times. “This mix of temporary and permanent actions allows us the near-term flexibility we need to drive improvement while preserving our ability to quickly pivot as we see the economy and areas of our business progress.”

The Times' Katie Robertson and Benjamin Mullin note, "Two months ago, Gannett cut 400 jobs and paused hiring in 400 more, after weak second-quarter earnings results. The company reported a 6.9 percent decline in revenue year over year to $748.7 million, with a loss of almost $54 million. . . . The company has more than $1 billion in debt from its merger in 2019 with Gatehouse Media. The company said this month that it had repaid $55 million of the debt since June 30 from the sale of real estate and other assets." It's sold scores of small papers and is trying to sell 60 more, sources say.

UPDATE, Oct. 13: Editor & Publisher offers more details.

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