• by Erik Sass  @eriksass1, January 5, 2011

Advertising spending may be on the rebound, but the newspaper business is still in trouble, as indicated by Gannett Co.'s announcement that all non-union employees of its community newspaper publishing division will have to take a one-week furlough in the first quarter of 2011.

This continues a strategy that has allowed the nation's largest newspaper publisher to cut costs without further layoffs.

According to Gannett executives, the week of mandatory, unpaid leave is necessary because of continuing declines in newspaper publishing revenues. In a memo to employees, Gannett community newspaper division president Bob Dickey conceded: "This was, quite frankly, an option I had hoped we could avoid," adding that "furloughs, while difficult, do allow us to protect jobs."

The furlough will affect all non-union employees at Gannett's 81 community newspapers. They do not apply to employees of USA Today or the Detroit Free Press, which Gannett operates in a joint venture with the Detroit News, owned by MediaNews Group.

Gannett executives are also negotiating with union representatives in the hopes of getting union employees to take a furlough as well.

Asked about possible furloughs in the second quarter of 2011, Dickey didn't rule out the possibility: "Our hope is that future furloughs will not be necessary, but business conditions combined with economic trends will be the major factors as we continue to assess this market. No decision on this can be made at this time."

Over the last three years, Gannett has implemented four furloughs of varying lengths. The company has also weathered multiple rounds of layoffs during the recession.

From 53,400 employees in 2000, the company has contracted 34.5% to about 35,000 at the end of 2009, according to the 2009 annual report. Total operating revenues declined 30% from $8 billion in 2006 to $5.6 billion in 2009. In the first three quarters of 2010, total revenues declined another 1.9% to $3.98 billion.