Gannett Co. confirmed Friday that it is laying off some of its newsroom staff as part of a cost-cutting effort to reduce expenses as revenue declines due to a drop in ad sales and customer subscriptions.
Gannett Co. confirmed Friday that it is laying off some of its newsroom staff as part of a cost-cutting effort to reduce expenses as revenue declines due to a drop in ad sales and customer subscriptions.
The McLean, Virginia-based company declined to provide specifics on the number of layoffs. Gannett spokesperson Lark-Marie Anton said in a statement that the company needed to “take swift action given the challenging economic environment.” These staff reductions are extremely difficult, and we thank our departing colleagues for their contributions.”
According to the company’s annual report, Gannett, which owns USA Today and more than 200 other daily U.S. newspapers with print editions, had more than 16,000 employees worldwide at the end of last year. More than 4,200 reporters, editors, and photographers were on the payroll.
The layoffs are the latest indication of the newspaper industry’s unrelentingly tough times, which has been steadily shrinking for more than a decade as more advertising shifts from print to digital and readers turn to other online sources for information and entertainment.
Major newspapers, such as The New York Times, The Wall Street Journal, and The Washington Post, have amassed sizable digital audiences by focusing on broad topics that appeal to people all over the country. Regional and local newspapers, on the other hand, have struggled to find a formula that works in smaller markets.
Gannett CEO Michael Reed hinted at the cuts last week after the company reported disappointing April-June results and lowered its outlook for the rest of the year.
Reed told industry analysts that Gannett would be “removing significant and permanent costs” from its operations, with a focus on operations devoted to producing and delivering print editions of its newspapers. That decision reflected Gannett’s recognition that it is unlikely to recoup much of the revenue that has vanished along with demand for print editions.
Gannett’s revenue fell 7% from the same period last year to nearly $749 million in the most recent quarter. Meanwhile, the company’s operating expenses increased by 1% year on year to almost $770 million.
This disparity is one of the reasons Gannett lost nearly $54 million in the third quarter. In another sign of trouble, Gannett reduced its full-year revenue forecast to around $3 billion, down from a previous range of $3.1 billion to $3.2 billion.
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