Gannett, the nation's largest newspaper publisher, said today that it will lay off another 10 percent of the work force in its local newspapers...
NEW YORK — Gannett, the nation’s largest newspaper publisher, said today that it will lay off another 10 percent of the work force in its local newspapers division as advertising revenue continues to plummet during the economic downturn.
The latest reductions, to come by early December, follow a 10 percent cut announced in August. Neither round affects USA Today.
Gannett isn’t revealing a specific number but said all would be involuntary. Some 600 of the 1,000 cuts in the first round were achieved through layoffs.
Newspaper companies including Gannett are seeing ad revenue declines accelerate as the weak economy puts additional pressure on an ad market already suffering from a migration of readers to the Internet.
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Gannett said Friday that advertising revenue at its publishing business fell nearly 18 percent during the July-September quarter compared with the same period last year.
“As all of you are painfully aware, the fiscal crisis is deepening and the economy is getting worse,” Robert J. Dickey, president of Gannett’s U.S. Community Publishing division, said in a memo obtained by The Associated Press. “Gannett’s revenues continue to be severely impacted by this downturn, and our local operations are suffering.”
Gannett had said Friday it was considering more cuts by year’s end. The layoffs announced today are part of that; other divisions are likely to see job cuts, too.
Besides the general cuts at local Gannett newspapers, which include The Arizona Republic and the Detroit Free Press, the company in September eliminated 100 management jobs as it consolidated circulation, finance and other operations into four regional groups.
The company also offered voluntary buyouts to about 30 corporate employees last week, on top of reductions of about 45 positions in that division since 2007.
USA Today cut 45 jobs last November.
Publishers of individual newspapers were asked today to develop local job reduction plans by mid-November to achieve the 10 percent division-wide cut.
“Decisions will be made locally because each of our markets is unique, with differing market conditions and individual needs in light of our previous reductions,” Dickey wrote.
Employees who are laid off will be offered as much as 26 weeks of severance pay — one week for each year of service.
“While this is more bad news, it is a sign of Gannett’s determination to remain healthy and viable as a company during these turbulent economic times,” Dickey said.
Despite the sharp reduction in ad revenue and the need to cut costs, analysts consider Gannett stronger than many of its peers.
Citi Investment Research analyst Catriona Fallon initiated coverage on three newspaper publishers late Monday and assigned only Gannett a “buy” rating. Fallon placed a “sell” rating on The New York Times Co. and The McClatchy Co.
Gannett shares have lost more than 75 percent during the past 52 weeks. Fallon said the company’s broadcast segment, which saw some gains from the Olympics and political advertising, also provides some downside protection to the investment.
Shares in Gannett closed up $1.09, or 11.9 percent, to $10.22 today.
Associated Press business writer Kristen A. Lee contributed to this story.