Tuesday, September 09, 2008

A reorg meant to cut costs -- and speed up change

Updated at 3:56 a.m. ET, Sept. 10. In a major reorganization of its troubled newspaper division, Gannett disclosed today that it had laid off about 100 top managers at the director level -- those in charge of human resources, production, advertising and other key departments at the papers. Their responsibilities have been transferred to other managers in the newspaper division's four U.S. regions.

The move, announced in a memo by division President Bob Dickey (left), had been expected for at least three weeks, and followed the earlier layoff of 600 lower-level newspaper employees, including reporters, press operators and drivers. Another 400 vacant jobs in the division were simultaneously eliminated in that mass layoff last month. Today's reorganization was the next logical step after the late-June Friday Afternoon Massacre, when Dickey announced the four-region structure.

In "flattening'' the troubled unit's management structure, Corporate hopes to save millions of dollars in wages and benefits. Just as important, reducing the number of decision-makers is meant to speed up change. In his memo, Dickey said: "I believe this new structure will improve communication, streamline processes, accelerate program deployment and, most importantly, improve our marketing efforts."

Four publishers gain more power
The newspaper division, called U.S. Community Publishing, comprises more than 30,000 employees -- the bulk of Gannett's 46,000. They work at 84 dailies and other GCI businesses.

The reorganization also concentrates more power in the hands of the publishers who lead the division's four business regions. Those uber-publishers are Laura Hollingsworth of The Des Moines Register; she's chief of the West region; Curtis Riddle of The News Journal in Wilmington, Del., East region; Carol Hudler of The News-Press in Fort Myers, Fla., South region; and Michael Kane of The Indianapolis Star, Interstate region. (More details about the other newly named regional executives at the bottom of Dickey's memo.)

Dickey suggested today that Gannett's financial position might not improve until well into next year -- "or later." He wrote: "Like many businesses, the weakening economy has had a significant effect on our financial performance. Hardest are the classified categories -- real estate, employment and automotive, where our year-over-year classified losses are in the 25% range. But it does not stop there: All segments are struggling with the current economic conditions and, unfortunately, forecasters predict that a rebound won't occur until well into 2009 or later."

Revenue losses force Dickey's hand
As across the newspaper industry, Gannett is losing hundreds of millions of dollars in advertising revenue as companies like Ford Motor and Apple shift more of the advertising dollars online, or to handheld devices such as smartphones like BlackBerries. The pace of those losses has quickened in the past year as the economy has soured, forcing Dickey to find ways to accelerate the division's switch to digital publishing.

Responding today, employees and their families expressed a range of emotions -- from anger that more weren't let go, to sadness. "Today the so-called 'higher ups' at various newspapers across the nation were told they no longer have jobs,'' Anonymous@5:15 p.m. said, in a comment on Dickey's memo. "One of which was my father. It's pretty sad information to hear. Still hasn't set in yet. He worked hard for many years."

Dickey's announcement came this morning. On Wall Street, investors appeared unmoved: Shares closed at $17.81, down 69 cents, or 3.7%, on a grim day overall for stock markets. The company's stock is down 60% from a year ago, Google Finance says.

Please post your reactions in the comments section, below. To e-mail confidentially, write gannettblog[at]gmail[dot-com]; see Tipsters Anonymous Policy in the green sidebar, upper right.

[Image: today's Des Moines Register, Newseum. The Register is one of 84 newspapers in Gannett's community newspaper division]


  1. Yep. You are losing business to new technology so lets get rid of some of leading technologists. Brilliant. Gannett is going to have its own version of Three Mile Island soon.

  2. Deployment and execution seem to be two words that pop up all over Gannett these days!

  3. Does anyone else find it curious (and telling) that so much of the East power went to Wilmington? Is that a reflection of the fact that the NJ group is a disaster area? I gotta say, I feel for Donovan. He was handed a cesspool and told to turn the crap into gold. It would've been tough with support, but they tied his hands behind his back AND broke his kneecaps by allowing some of the problems to Skip on to better jobs.

  4. Funny thing about that NJ Group though: there really weren't all that many let go. The Asbury Park Press continues to run real fat. What's up with that?

  5. 7:47. Maybe they have all the right pictures ...

  6. Does anyone think that shooting these managers is a direct response to comments here on Jim's blog?

    Remember, many of us bitched that there were so many clerks, lower level writers, etc. taken in the 600, and management had been left alone.

    The makeup of the cuts look as if each group was told to find 'x' number of managers they could do without. Not so much as actual savings, but a body count that sounded right.

    But perhaps I've watched Conspiracy too many times.

  7. Well, if one thing they learned from Jim's blog - don't f*ck around telling everyone they're eliminating 100 managers "next week." Do it and be done.

    Although the initial memo from Dickey made absolutely no logical sense. It sounded as if all local managers were out and one circulation director in Indiana would take care of every paper in the Interstate group.

  8. Just what do EEs do where you work?

    I didn't see the EE where I worked do much of anything except copy edit, sit in meetings, and copy edit some more, and go to more meetings.

    Also, do any of the other places have page designers but no copy editors?

  9. The EE at our site serves a very important purpose.
    He follows the Publisher around and tells him how great he is.
    Small man, Huge ego.

  10. Do any properties still have a real journalist in the EE's office? I can think of two but I don't work for them so I'm putting it out there for the masses to respond.

  11. To 9:24
    Don't forget that he goes to lunch with the Publisher, too. Also an important role.

  12. What are they going to do with all those reserved parking spot signs?

  13. Well one thing I see is wrong it the stock price it was not 18.51 but 17.81 on today close. The diviend day is wendnsday good luck to all us stock owners.

  14. 10:54 PM
    Aaaah. Reserved parking spaces. My pet Gannett peeve.

    How stupid is it to have spaces reserved for all the static people---the ones who don't leave the office?

    At my non-Gannett place, the photogs got the closest in spaces for a good reason. They carried all that heavy equipment and oftentimes had to run out on a moment's notice or risk getting beat by a competitor.

    So, I'm thinking everyone does that.

    Wrong. Not the pitiful little place with all those tacky spray painted reserved spaces at Gannett. Nope. Parking spaces told the higher ups just how high up they were, I guess.

    Common sense and business sense at Gannett? Never. Would anyone at Gannett actually make a connection between parking spaces and competition or parking space proximity and dropped equipment? Doubt it.

  15. Just a Q: Where these people surprised that they were let go? Was today the actual day they found out? Or did they have to go through grueling agony like the rest of us hourlies did a few weeks ago.....

  16. @12:19

    It was a surprise to some. And also a very stupid decision, in many cases. Some papers have an IT staff you could count on one hand, and they let go the person who knew the most about how things run. Not a smart business decision at all.

  17. Just a Q: Where these people surprised that they were let go?

    If they were surprised, they weren't paying attention or thinking that it wouldn't happen to them. I left Gannett a little over a year ago after I was asked to serve on a taskforce to plan to "consolidate" functions to make things more efficient. It didn't take long to figure out that I was helping plan the demise of my job. There's been a rumor floating around for about a year that HR was going to get consolidated and I had heard another rumor floating around that circulation directors were going to get cut. So, there were some grumblings of what was to happen. It just took a while to be put into place.

  18. RE: 9:52 p.m. Do any properties still have a real journalist in the EE's office?

    We are very fortunate in Palm Springs to have a real journalist as an EE. Go Green!

  19. @11:02 pm: Thanks for spotting that incorrect stock price; I've now updated it.

  20. @ 10:54 - in Tucson, the photogs get the spots closest to the door, as they should. Better they don't run w/ a $5k video camera.

    Everybody else jockeys for shady spots - get here early and your car won't melt!

  21. I love it! The same witch that treated me like I was "fired" 3 weeks ago was one of the VP's in HR that got the ax yesterday! The letter I got stated how it was a hard decision and that I was a valuable employee and it was a hard decision...blah blah blah, yet I was given 30 min to pack my desk and was hovered over while I packed. This HR lady seemed to get way too much enjoyment telling me my position was eliminated and enjoyed hovering over me while she watched the clock as I packed.

    Ha, Gannett got her to do their dirty work only to do the same to her 3 weeks later! Karma baby, Karma!

  22. How on earth could you possibly give Curtis Riddle more power and responsibility?? The man is incredibly stupid and slow on the draw. He has never produced good results in Wilmington. There isn't a creative bone in his body. He is a puppet for corporate... never does anything unless it is the "flavor of the month" coming out of the corporate castle. He doesn't have the respect of the employees in Wilmington and the publishers that report to him think he is a joke! I would have thought that when Watson left town, Riddle would have lost his protection and flew the coop. No such luck. Another feather in the cap of Affirmative Action.

  23. Maybe now the industry will wake up and realize the danger of giving away replicas of their newspapers for FREE. Sure the economy sucks. But this isn’t the first time. We need to figure out how to give away the right amount of news and information to win repeat users of our sites, without giving it all away! Why buy the cow when you can get the milk for free? Maybe the remaining Gannett execs in their shortage of free time can build a winning web model that builds revenue instead of devastating it.


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