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.

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