Gannett advised in a memo to staff this morning that it will be instituting furloughs and other cost reductions in response to big advertising declines.
The note from operating CEO Paul Bascobert said details would follow as regional executives determine their plans.
A separate memo from Maribel Wadsworth, president news at Gannett and publisher of USA Today, said that reporters and editors who earn more than $38,000 annually will be scheduled to take an unpaid week off on a rotating basis.
Gannett has used the same pattern in the past. It allows those affected to arrange a gig to earn some income during that week.
Bascobert’s memo said “… we must now address the financial impact of this pandemic. As in our approach to addressing the impact on our people, we will approach the coming months proactively, thoughtfully and aggressively.”
“Over the past few weeks,” Bascobert added, “the executive team has worked to fine-tune our approach for each part of the business. Our plan is to minimize long-term damage to the business by implementing a combination of furloughs and pay reductions.”
Executives will take a 25% pay reduction and he will take no salary, Bascobert said.
The memo was followed with a detailed FAQ.
Team –
I am writing today to update you on the events over the past few weeks and to announce a series of cost initiatives we are planning to implement to help navigate the coming months.
A little over 4 weeks ago, we first announced our initial response to the emerging COVID-19 spread. I mentioned the situation would be fluid and we would work to anticipate and respond as quickly as possible.
I don’t think any of us expected events to progress so quickly and the effects to be so widespread, but your response has been incredible; you have shifted your work places, developed new ways of working together and implemented new processes to keep our production facilities safe. Collectively, you helped us get office teams moved home before cities closed, including our Mumbai operation just hours before the country shut down. Your quick action has helped to minimize spread of the virus among our staff and has allowed us to continue operations with relatively small disruption.
Despite these efforts, we do have members of our team who are presumed or have tested positive for COVID-19. We know this is a stressful time for these individuals and their families and we send them our heartfelt wishes for a speedy recovery.
With our operations stabilized, we must now address the financial impact of this pandemic. As in our approach to addressing the impact on our people, we will approach the coming months proactively, thoughtfully and aggressively.
As you might expect, the impact on our operations has been varied. Direct sold advertising has already slowed and many businesses have paused their scheduled marketing campaigns. On the other hand, we have small businesses that are partnering with us to quickly build their online presence. We’re also seeing a spike in our digital traffic and online subscriptions as readers turn to us as a trusted source for information. Overall, though, we expect our revenue to decline considerably during this period and we need to address this situation head on.
Over the past few weeks, the executive team has worked to fine-tune our approach for each part of the business. Our plan is to minimize long-term damage to the business by implementing a combination of furloughs and pay reductions. By choosing a collective sacrifice, we can keep our staff intact, reduce our cost structure, deliver for our readers and clients and be ready to emerge strong and with opportunity to grow when this crisis passes. Following this announcement, you will hear from your leadership on the specific actions to be taken in your area, many of which will begin as soon as this week.
It is important to note that our integration work will continue. This is our plan for the future and despite the challenges of today, we must stay committed to creating an efficient operating structure. So yes, as I have said to you all in the past, that means we will see some permanent reductions during this period.
Everyone will be touched by these changes in some form. For some it will be economic, for others it will mean covering the work of a colleague on furlough, for many it will be both. Our executive team has stepped up and will be taking a 25% reduction in pay. Similarly, I will not be taking any pay until these furloughs and pay reductions have been reversed. We realize these actions will put economic hardship on all of you and I don’t take these measures lightly. I would simply and humbly say “thank you”. Our goal is to ensure that when we get through these difficult times, we emerge fully able to continue our important role serving our readers, clients and communities. This is the mission that binds us and tests our resolve.
Today, we are dislocated but not distracted, challenged but not disheartened. Our journalists continue to go where the reporting requires, and our production teams navigate quarantines and lockdowns to ensure our papers get printed and delivered. Our sales teams continue to help clients through phone and video conference, sometimes just to be a good listener to a client in need. We know this is the moment when our communities need us most and we will be there for them.
I am truly grateful for your ongoing work, support and sacrifice and can’t thank you enough for all that you do. We are a great company now and, with your help, I know we’ll be a great company in the years to come.
Thank you, stay well and please reach out to family and friends who may need help in the coming weeks.
Paul
Poynter will provide updates from other news organizations on furloughs, pay reductions and other cost-cutting as information becomes available.
Rick Edmonds is Poynter’s media business analyst. He can be reached at redmonds@poynter.org.
This article was updated to include CEO Paul Bascobert’s memo to staff.
