Gannett, the owner of USA TODAY and local news operations in 45 states, announced Thursday another round of job cuts in the company’s news division after a third-quarter loss and an earlier series of cost-cutting measures.
The company, which plans to cut 6% of its estimated 3,440 staff in the news division, will notify affected employees on Dec. 1 and 2.
Henry Faure Walker, president of Newsquest, Gannett’s UK-based media division, who is overseeing the U.S. news operations on an interim basis, said in a memo to employees that the company was “not immune” to the economic conditions many industries and companies are facing.
“While we have taken several steps already, we must enter the new year in a stronger economic position, and the reality is that our news cost base is currently too high for the revenues it generates,” Walker wrote in the memo to employees sent early Thursday. “Regretfully, this means we will be implementing further reductions.”
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Walker said the company is also targeting many “non-payroll savings” and that other divisions besides news will experience cuts.
Earlier this month, Gannett announced a third-quarter net loss of $54.1 million as revenues fell. The latest quarterly loss compared with a net income of $14.7 million in the same period a year earlier. Gannett also forecast a total net loss of $60 million to $70 million for the year.
Last week, Gannett Media President Maribel Perez Wadsworth announced that she was leaving the company on Dec. 31.
The company has been taking cost-cutting measures as it works toward at least $200 million in annualized cost savings. About 400 employees, or 3% of Gannett’s U.S. workforce, were laid off earlier this year.
Gannett has said it is pausing its 401(k) match and most hiring, offering employees a voluntary severance plan and is having workers take five days of unpaid leave. CEO and Chairman Mike Reed also plans to reduce his salary through the end of 2023.
Gannett previously offered other voluntary options for staffers in the interest of near-term savings: the opportunity to work a shorter week and to take an unpaid sabbatical for up to six months.
The company has also been divesting some of its publications.
While the cost-saving initiatives helped improve the company’s adjusted EBITDA in the third quarter compared with the second, Reed says the company expects to capture most of the benefits between October and the end of 2023.
In a November call with analysts, Reed and CFO Doug Horne said they were aiming to cut $200 million to $240 million from the operational budget in 2022.
Horne said the company would consider outsourcing administrative and business support functions such as finance, accounting, sales enablement and technology and increasing automation and efficiency in B2B marketing, accounting and data intelligence.
Gannett shares closed down 2.6% Wednesday at $2.19 per share.
Swapna Venugopal Ramaswamy is a housing and economy correspondent for USA TODAY. You can follow her on Twitter @SwapnaVenugopal and sign up for our Daily Money newsletter here.
