GCI New Gannett Co Inc

Gannett Co. plans to cut 2% of jobs and invest in more acquisitions to transform its business, according to a memo to staff, as the newspaper industry struggles with a particularly turbulent advertising environment.

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.

In its latest quarter, ending June 30, Gannett reported a 0.2% fall in overall ad revenue, hurt mostly by print ad declines, although it didn't specify by how much. In the same period, it completed the acquisition of Journal Media Group Inc., North Jersey Media Group Inc. and digital marketing company ReachLocal Inc.

It also has been engaged in a continuing effort to acquire Tronc Inc., publisher of titles such as the Los Angeles Times and Chicago Tribune. The company, which is scheduled to release its third-quarter earnings on Thursday, has seen its share price fall 37% since it first made its offer public in April.

"Over the next 18 months, we will continue to build our scale and invest in important digital capabilities and experiences—such as critical e-commerce infrastructure and significant upgrades to our digital content platforms," Mr. Dickey wrote.

Gannett isn't alone in having to make difficult choices as it transitions its business to become more digitally focused.

Last week, The Wall Street Journal offered employees buyouts and warned of possible layoffs amid a broad revamp of operations driven by the continued slide in print advertising. the New York Times offered buyouts earlier this year and has said it plans additional downsizing next year.

Write to Lukas I. Alpert at lukas.alpert@wsj.com

(END) Dow Jones Newswires

October 24, 2016 18:15 ET (22:15 GMT)

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