Gannett Plans to Cut 2% of Its Workforce
October 24 2016 - 6:30PM
Dow Jones News
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)
Copyright (c) 2016 Dow Jones & Company, Inc.
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