UPDATED: Oct. 13, 2022
Gannett will be requiring employees to take one week of unpaid leave in December and is seeking volunteers for buyouts, CEO Mike Reed announced in a staff-wide email Wednesday.
The company also has paused overall hiring and will temporarily suspend matching contributions to employee 401(k) accounts starting Oct. 24. The email, which was sent companywide though some staff said they didn’t receive a copy, came two months after Gannett laid off 400 employees and eliminated 400 open positions in response to a bleak second quarter.
“These are truly challenging times,” Reed wrote. “The company continues to face headwinds and uncertainty from the deteriorating macroeconomic environment which has led the executive team to take further immediate action.”
Gannett, which is the nation’s largest newspaper chain with more than 200 print papers, has struggled significantly in recent years. In its most recent financial report, Gannett reported it lost $54 million during the second quarter. Its shares have since plummeted, continuing a downward trend. Gannett stock is now trading at $1.40, down 77% over the past year.
The company also is saddled with more than $1 billion in debt from its merger with GateHouse in 2019. Earlier this month, Gannett reported it had paid down $55 million of that debt since June 30. It also will be selling $65 million to $75 million in real estate and other assets.
Early Wednesday afternoon, Gannett released a set of FAQs about the new cost-cutting measures, but some details remain uncertain. The company did not specify when it would resume matching contributions to 401(k) accounts or how many buyouts it is seeking. (Gannett later made the FAQ guides private, only available to employees.)
Gannett also will be allowing employees to voluntarily reduce their work hours or request an unpaid sabbatical.
It is unclear who will be impacted by the changes. Reed’s email included a disclaimer stating that the cuts may not apply to unionized employees. Roughly 1,500 employees across 50 newsrooms are represented by the NewsGuild.
NewsGuild president Jon Schleuss tweeted that many of the changes will not immediately impact those employees.
“Folks bargaining first contracts are protected by status quo and the company cannot unilaterally make changes without negotiating with workers,” Schleuss wrote. “For folks under a contract, it depends on what your contract says and most of the issues need to be bargained. The company said it plans to bring up these cuts in negotiations.”
Gannett has cut its staff considerably since the 2019 merger. At the time, the two companies had roughly 25,000 employees. By the end of 2021, that number had shrunk to 13,800 in the U.S. and 2,500 abroad.
Many of those cuts came from layoffs and buyouts. Others came from shifts in newspaper ownership. Since 2020, Gannett has sold more than 100 newspapers and reportedly plans to sell at least 60 more of its nearly 500 publications.
