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Summary:

Gannett (NYSE: GCI) is ordering its 40,000-person workforce to take a week off without pay this quarter, as it seeks to cut costs without re…

imageGannett (NYSE: GCI) is ordering its 40,000-person workforce to take a week off without pay this quarter, as it seeks to cut costs without resorting to more layoffs. Gannett Blog’s Jim Hopkins has memos on the mandatory time-off from company CEO Craig Dubow (here) and newspaper division president Bob Dickey (here). Dubow mentions that the all executives, himself included, have to take unpaid leave. Even unionized staffers are being told to participate as well. A FAQ also posted on GannettBlog notes that there will be a few exceptions, including “certain essential employees,” who were otherwise unspecified. Also, newly hired employees and other individuals and units who are impacted by other expense reduction measures also can avoid the time-off period. Dubow: “…we decided a furlough program would be the fairest and least intrusive way to meet these fiscal challenges in the first quarter, which is traditionally the lightest time of the year.”

In his memo, Dickey adds that “exempt, salaried employees must take one full payroll week within the pay period,” while “non-exempt, hourly employees” can take five days at any pre-approved time before the last weekend in March. Last month, the Seattle Times asked the same of its 500 non-union staffers. In October, Gannett said it was laying off about 3,000 staffers at its 80 local papers across the country, while just two months before that, the publisher said it was eliminating 1,000 positions, with 600 staffers being let go.

Meanwhile, Gannett flagship USA Today is also making sacrifices, Hopkins notes elsewhere on his blog. In a memo attributed to USAT Publisher Craig Moon, no one at the paper will receive a pay raise after February 1. Over the past few weeks, Dow Jones (NYSE: NWS) and NYT execs also announced that there would be no pay hike this year, again, due to the uncertain economy and declining ad revenue outlook.

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  1. this is a pretty radical thing for a company to do. things must be really really bad

  2. Voice of Reason Thursday, January 15, 2009

    Gannett has enthusiastically encouraged its employees to take unpaid time off since 2000. I believe this is the first time it has been mandated.

  3. In looking at the balance sheet and cash position of the company I now know why they are doing this: they are running out of money! They will essentially burn through ALL their cash this year and have to use debt to finance their existence — not a good place to be.

  4. Their dividend yeild is 20%. They should stop paying dividends already and go acquire some incoming generating digital companies. All companies are cheap now with the downturn! On top of that, focus on other revenue generating services other than the advertising model….

    Here is what I would do:

    Buy Blockbuster for 350MM (BBI) and use reminant inventory to get people to subscribe to the digital movie download service. Both News and Movies are essentially both content….

    Buy Expedia for 3.5B in cash and stock… and use your online inventory to get people to buy travel packages. Print travel special in every paper based on the demogrraphic and deals from the local airport of the local paper.

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