December 10, 2020

Gannett told its business side employees that 485 of their jobs will be outsourced to Hyderabad, India, early next year.

All of the jobs involve “business process,” the company said in a frequently asked questions document — things like paying bills, invoicing customers, preparing monthly summary reports and reconciling the books.

Those being laid off in the U.S. will be notified by Jan. 15 but can stay on until April. Many will be involved during that time in “transitioning” the work — that is, training their replacements.

The company said it does not have plans right now to do more outsourcing later in 2021 but did not close the door on that option.

It explained the move as follows:

Gannett is undertaking a massive company-wide transformation. To help the company transform quickly, we must remain nimble and focused on the needs of the business, while keeping our operating costs low, our control environment tight and our processes as efficient as possible.

New Media Investment Group and its GateHouse chain acquired Gannett (retaining the Gannett name) a little more than a year ago. To do so it took out a $1.2 billion loan from Apollo Global Capital and assumed another $600 million. Of that debt, $180 million has been repaid and another $500 million refinanced at a lower interest rate.

CEO Mike Reed said at the time that the company will need to lock in at least $300 million in annual cost-saving “synergies” to make the deal work.  The pandemic ad recession cranked up the financial pressure — and the company responded by putting nearly all employees on a week of unpaid furlough over several months.

It offered buyouts this fall to anyone in the company, and 500 applications were accepted, about half of those journalists.

My colleague Kristen Hare has compiled a running total of 2020 layoffs at Gannett and other media outlets. I have reported that some of Gannett’s 250-plus newspapers have as few as one locally based reporter and that tight staffing has led to anomalies like a recent Sunday print edition of the Journal News in Westchester County that had no mention of Westchester in its front-page content.

This article was updated to include details about Apollo Global Capital’s loan to Gannett.

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Rick Edmonds is media business analyst for the Poynter Institute where he has done research and writing for the last fifteen years. His commentary on…
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