Things aren’t getting any better in the newspaper industry, judging by Gannett’s decision to implement a one-week unpaid furlough for employees of USA Today and Gannett Publishing Services, which prints and distributes USA Today and its community newspapers, as a cost-saving measure.
The furlough is mandatory for all non-union staff in publishing services, USA Today and USA Weekend, the newspaper-distributed magazine, except for those USAT employees working in sports, travel, or direct sales, according to the memo from USA Today executive vice-president Susie Ellwood and Gannett Publishing Services president Evan Ray.
The memo cited continuing economic uncertainty and weakness in national advertising demand, noting that “the bottom line is that business conditions continue to be mixed and the national advertising environment remains volatile.”
Employees must take the furloughs before June 24, one week before the end of the second quarter.
On a positive note, community publishing employees were spared from this latest round of furloughs in order to implement the company’s new subscription model at community newspapers nationwide. In February, Gannett community publishing president Bob Dickey revealed plans to create online paywalls for all its community newspapers, numbering 82 in all. Nine Gannett community papers are already charging for content.
Also in February, Gannett’s community publishing division offered early retirement to 665 community publishing employees. While Dickey emphasized that the offer is entirely voluntary, he hinted that the company may be forced to implement more drastic cost-cutting strategies, implicitly including layoffs.
Last year, Gannett’s publishing division (including USA Today) cut its workforce from 22,400 full and part-time employees at the end of 2010 to 20,900 at the end of 2011, for a 6.7% reduction.
Gannett Co.’s total revenues have declined from $8 billion in 2006 to $5.2 billion in 2011 -- a 35% loss in five years. This is due mostly to a steep decline in publishing advertising revenue, from $5.3 billion to $2.5 billion over the same period -- a 53.3% decline. Total newspaper circulation revenues declined 17% from nearly $1.3 billion in 2006 to $1 billion in 2011.