Gannett CEO Mike Reed announced “immediate action” Wednesday to ensure the publisher’s “balance sheet remains strong.” Furthermore, Reed pointed to a “deteriorating macroeconomic environment”. The company’s flagship brand, USA TODAY, hasn’t been sure whether the United States has entered a recession, but Reed certainly believes so given the Gannett furlough announcement.
The big Gannett furlough news came during a company townhall. Gannett journalist Kati Kokal reported the meeting lasted less than 15 minutes. In her words, employees were “either speechless or swearing.” Furthermore, Kokal remarked that Wednesday marked “two months to the day that Gannett laid off 400 people.”
In a bid to save money, Gannett no longer holds these town halls in the headquarters auditorium. Since selling their McLean, Virginia home office building, the newspaper publisher has to pay to use the large, lecture hall type space. Reed, in shirt sleeves, instead holds the calls from the USA TODAY nerve center- the newsroom. According to social media reports from attendees, no questions were taken from employees.
The Announcement
Here is what Reed said employees “can expect”:
- A suspension of 401(k) match for contributions on or after October 24, 2022.
- December Mandatory Leave (Gannett Furloughs): Employees must take 5 days of unpaid leave at the holidays in December. This is also known as a furlough.
- Voluntary Severance: Employees can voluntary resign and receive money in return
- Hiring Pause
- Voluntary Work Fewer Hours – “commensurate with a 20% reduction in compensation”
- Take an “unpaid sabbatical”
The measures were a body blow to the firm’s journalists. NewsGuild of New York reported this month that Gannett employees already faced “food insecurity, many working two to three jobs just to afford basic needs.”
USA TODAY’s Las Vegas based money reporter wrote the paper’s story on it’s parent’s own bad luck. Bailey Schulz reports that Reed told employees he would “take a salary reduction through the end of 2023.”
Gannett stock as of October 12 has seen a 74% decline in value year to date in 2022. Furthermore, Wall Street was not impressed with Wednesday’s announcements. The stock closed down 0.7% and fell further in after hours trading.
