NEW YORK (AP) - USA Today publisher Gannett Co. imposed one-week
unpaid furloughs for most of its U.S. employees Wednesday, saying
the move could help minimize the need for further layoffs amid a severe advertising downturn.
USA Today also declared a one-year freeze on wages effective Feb. 1.
Although Gannett is regarded by many analysts as one of the nation's most financially sound newspaper publishers, the economic recession and the ongoing migration of advertising to the Internet have pounded its revenue prospects.
Gannett had several rounds of layoffs last year, including one in December slashing the work force at most of its U.S. newspapers by 10 percent and another in November cutting newsroom jobs at USA
Today by about 5 percent.
The Seattle Times asked 500 managers and nonunion workers last month to take a week off without pay by February, while The Wall Street Journal and other Dow Jones & Co. properties announced a one-year wage freeze for nonunion employees last week. Most newspapers also have been hit with various layoffs, buyouts and job
At Gannett, employees must take the furloughs during the first quarter. Union-covered employees will be asked to participate, and layoffs are possible if they refuse.
"After much consideration, 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," Gannett Chief Executive Craig Dubow said in a staff memo. "We sincerely hope this minimizes the need for any layoffs going forward."
Gannett owns 85 U.S. daily newspapers and 23 TV stations in the U.S. It has more than 40,000 employees.
USA Today Publisher Craig Moon told employees in a separate memo
that their sacrifices will keep the newspaper healthy.
"We find ourselves in an incredibly tough media and economic climate," Moon said. "Our advertising revenues continue to slump as we enter 2009. With little visibility of future ad schedules, we like others at Gannett, have had to make some very difficult decisions."
In an unsigned supplemental memo, USA Today said the furloughs were necessary "to avoid the plight of some other companies and industries. Gannett is a solid company and we want to stay that way. Instituting furloughs at this time is a sound financial move by a sound company that is facing severe economic conditions."
Neither Moon nor Dubow disclosed expected savings.
Gannett's British employees are not affected, but the U.K.-based Newsquest division is taking other, unspecified expense-reduction measures.
Gannett spokeswoman Tara Connell said alternatives such as pay cuts, reduced hours and broader wage freezes beyond USA Today were considered and remain on the table.
To further cut costs, Gannett already has centralized customer-service operations, closed plants and sold properties considered unnecessary.
The company did not immediately respond to inquiries on whether dividend cuts were among the options. At the current quarterly dividend rate of 40 cents a share, Gannett spends about $365 million annually on dividends. At Wednesday's closing price of $7.80, down 27 cents, or 3.4 percent, that amounts to a dividend yield of about 20 percent.
(Copyright 2009 by The Associated Press. All Rights Reserved.)