Citing a slow economy, newspaper chain Gannett on Tuesday announced it was cutting 700 positions, about 2% of its total workforce.
In a memo obtained by Gannett Blog, Bob Dickey, Gannett US community publishing unit president, blamed an economic recovery that “is not happening as quickly or favorably as we had hoped and continues to impact our U.S. community media organizations.” Dickey highlighted weakness in the real estate sector, slow job creation and less demand for autos as challenges to the organization. “National advertising remains soft and with many of our local advertisers reducing their overall budgets, we need to take further steps to align our costs with the current revenue trends,” Dickey wrote in the memo.
Kantar Media this month reported that the overall advertising market grew 4.4% in the first quarter compared to 5.1% in Q1 2009. Ad revenues for local newspapers fell 1.1% in the quarter, and the segment had declined for 22 consecutive quarters. Revenues for national newspapers fell 7.5%, Kantar reported. Meanwhile, Internet display advertising revenues rose 14.6% for the quarter, buoyed by — among other factors — strong demand by automakers.
Though Gannett’s digital business is growing, the increase isn’t happening fast enough to offset print declines. In the first quarter, Gannett’s revenues from traditional publishing fell 6.2%, to $929.8 million. Digital revenues rose 12.4% to $251.3 million, representing about 20% of the company’s operating revenues.
The move comes after Gannett CEO Craig Dubow received $9.4 million, including a $1.75 million cash bonus in 2010, and Chief Operating Officer Gracia Martore got $8.2 million with a cash bonus of $1.25 million. Those bonuses were awarded partially for cost cutting, which included layoffs, according to a shareholders proxy report filed in March.
Via Mashable: http://www.mashable.com