Gannett's decision to furlough all of its workers for one week without pay during the first quarter is stunning news. It is one of an increasingly common number of instances in which newspapers behave like manufacturers of widgets. Closing a bureau is the equivalent of closing a plant. Furloughing workers is what manufacturers do when there's not enough work (orders) to go around, too much inventory and diminishing cash flow. Come to think of it, that's General Motors' MO. I guess producing the news is not so different from producing cars after all.
The newspaper company announced that every employee is affected. That's more than 40,000 people. News staff can't show up for work, can't email and can't make calls to sources. No work. Period. Labor laws/regulations apparently require it. Nothing left to do but figure out how to stagger the time off. Gannett has already frozen salaries and last year cut its workforce by more than 15 percent.
Gannett is an egregiously poor caretaker among newspaper companies. It was Gannett, after all, that pushed for ever higher profit margins that competitors felt they had to follow. Even now, the company pays a hefty annual dividend of $1.60 a share. With 228 million shares outstanding, that comes to $365 million a year, or $1 million for each day of the year.
Shouldn't Gannett cut its dividend to conserve cash? Maybe suspend it for a time? And let's not forget that even now Gannett's operating margin is still a solid 21.5 percent, probably the leader among newspapers.
A one-week furlough is better than no job at all. If it staves off more layoffs, then reporters and editors will embrace it. Perhaps other newspaper chains are calculating how much they would save by following Gannett's example, as so many newspaper companies have done and continue to do.
Several years ago, who would have thought of a furlough for newspaper reporters and editors? Welcome to 2009.
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1 comment:
having worked for Gannett, and suffered through memos urging us to use both sides of a sheet of paper, this is kind of mild. they always squeezed the tomato so hard that there was nothing left of particular interest.
what goes around, comes around. Gannett top brass is making Tony Ridder and Sam Zell look good, as hard as that is to believe.
ditch journalism, people. the field will be cut in half within 18 months (vs. 2000 staff levels) and you will be picking thru the career leftovers the rest of us beat you to. there will never be a 'recovery' to put humpty dumpty together again. think of the family - ditch the newsroom and look ahead.
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