Yet, in a new statement that sounds more definitive, the company says it assumes "headcount'' will fall next year in the following business segments, by these percentage amounts:- U.S. papers (excluding USA Today): down in the "low teens.''
- USAT: down in the "mid single digits."
- U.K. division Newsquest: down in the "mid teens."
- TV division: down in the "mid to high single digits."
Debating GCI's intentionsSome readers challenge my interpretation of the statement, and the remarks by Dubow (left).
"Did Dubow say there would be ADDITIONAL job cuts in the 'low teens' in 2009?" asks Anonymous@2:12 p.m. "I took a look at the Gannett statement and I think they are saying that the number of employees working in that division at the end of 2009 will be 12%, 13%, 14% ('low teens') less than in 2008. Given there have been three or four rounds of cuts in 2008 at most newspapers, I think this really says they are NOT projecting additional job cuts in 2009. The 2008 cuts plus retirements/attrition will probably add up to 'low teens' that's mentioned."
Dubow: 'Sizing to revenue'
I suspect Gannett was already planning to reduce newspaper employment again next year -- on top of what happened this year -- before the economy deep-dived. Now, with a full-on recession, it's hard to see any other choice. Remember what Dubow told the conference earlier:
"We are always going to size to the revenue that is there," he said, adding that decisions will be made market-by-market. "We're going to have to see where and how the economy reacts next year.''
The Associated Press has now moved a story.
Chief Financial Officer Gracia Martore (left) said holiday-related advertising sales are key to what happens next. "The next three weeks are crucial to our results," she told the conference. In the first two months of the current quarter, she said, total revenue is down about 14% from a year ago.Their remarks came on the third and final day of the 36th annual media week conference in New York City. I listened to the Webcast (replay here; scroll to Gannett link), but didn't live-blog quite like I did last year. UBS investment bank was the sponsor.
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How nice to time this conference so that the media people who don't live in NYC can make a weekend of it and get their Christmas shopping done.
ReplyDeleteSo, where's the grand transformation in all of this?
ReplyDeleteYou are so negative Jim! I give you credit for understanding what drives page views for your site. Take the negative side of everything and watch the site grow.
ReplyDeleteDear Craig:
ReplyDeleteAt some point you might realize that preserving your staff will help you keep your revenue, preserve your market and even make you money. And every time you cut staff, other staff -- mostly your best staff -- are going to look for new jobs.
Quit feeding this downward spiral. Look beyond the nose on your face. The main person benefiting from this strategy is you -- it's not your customers, your advertisers, your products, your employees and not even your stockholders if they have a perspective that stretches beyond one quarter.
This strategy ensures the destruction of the company, but does it in a way that provides you plausible deniability. I guess that's what's important.
Jim,
ReplyDeleteYour headline is a poor match for what Dubow said. Of course they will cut more jobs if they have too next year.
At least at my paper, we were told that the most recent newspaper cuts were made on a "worst-case scenario" forecast for 2009.
11:12: I disagree. This is called consumer-driven, local-local coverage of what otherwise would be a bureaucratic event.
ReplyDeleteMany of my readers want to know one thing: How safe is my job next year? That, then, is my focus.
11:23 am: What headline would YOU suggest?
I've been through this with two different companies now. They always say the cuts are made for the worst-case scenario, then come back and say "it's even worse." Publishers try to put lipstick on the proverbial pig so they can keep some semblance of staff and morale....
ReplyDeleteHEADLINE
ReplyDeleteTitanic hits iceberg, captain points out benefits of free ice
Maybe the UBS event wasn't the place, but all the double talk about "hard decisions on head count" and "delivering content" really didn't tell anybody anything about the heart of the company. The focus was on the different "platforms" Gannett has purchased, ignoring completely that its roots are a NEWS GATHERING AND REPORTING COMPANY. Which means to me that "platform" is not longer important to anybody in the company any longer.
ReplyDeleteBTW, The Des Moines Register tried to use MOGULUS [or whatever that live video broadcast "platform" is] to broadcast streaming video of a state Supreme Court event and I could only see a few words at a time as the darned thing kept buffering and cutting off the audio and the picture. Miserable.
Somebody and the UBS presentation urged the company to forgo the dividend this year and reinvest the money in the company. Their response, "Thank you, John."
Good grief.
I don't even know those people and I'm growing to dislike them.
"We are always going to size to the revenue that is there," Dubow said.
ReplyDeleteFine, but I don't see any significant efforts being made to actually sell more ads. For too long, Gannett sales staff were order takers, operating in mostly monopoly markets. Gannett simply does not have the quality sales force it needs to compete for the ad dollars. Change that and you save your journalism jobs.
So, they're chopping headcount to mid-teens numbers??
ReplyDeleteto 11:50 AM
ReplyDeleteMarketing budgets are the first thing that a business will cut during lean times.
Gannett has secured a monopoly in many areas to where they set far over-priced print rates, in products that hold little to no value to the advertiser. It's not the sales force to blame all the time. Lack-luster products are to blame.
Advertisers will invest what few marketing dollars they have into a program that first and foremost fits their ability to spend. Gannett has over-priced their worth in the small and mid-sized markets.
Niche products such as Gannett magazines and other non-dailies...I've seen, at 3 different regional sites, pallet after pallet of undelivered product. Month after Month, quarter after quarter. The advertiser's message is NOT getting out because the product sits gathering dust at old, and all but deserted loading docks where presses once ran.
Bottom line is...Gannett has little of value to sell to businesses that they actually need or can afford in this economy.
It's almost as if they don't have a plan. Whatever happened to the 5 year plan that was crucial to running a business. Does Dubow have an MBA? If he doesn't he should not be where he is. In fact no one at the top should be there unless they have an MBA.
ReplyDeleteNope. Headcount will be down to low teens, according to the operating assumptions in the press release.
ReplyDeleteWhat's the headcount now for community publishing?
Jim:
ReplyDeleteThe one group I've seen very little noted about is GNS. Did they suffer recent layoffs? Any projected in '09? For my money and based on what we get from them, that would be a good place to start trimming. Keep the local products intact.
1:01: GNS is not immune to the layoffs, in addition to having gone through somewhat painful attrition for the past two years or so. We're just trying to survive like everyone else.
ReplyDeleteDid Dubow say there would be ADDITIONAL job cuts in the "low teens" in 2009?
ReplyDeleteI took a look at the Gannett statement and I think they are saying that the number of employees working in that division at the end of 2009 will be 12%, 13%, 14% ("low teens") less than in 2008.
Given there have been three or four rounds of cuts in 2008 at most newspapers, I think this really says they are NOT projecting additional job cuts in 2009. The 2008 cuts plus retirements/attrition will probably add up to "low teens" that's mentioned.
The announcement of low-teens isn't clear. Is it a reduction in force by 12% during 09? Say 5% layoffs in March, etc. Or is it that there are now less employees than 2008?
ReplyDelete2:14: Exactly. I think it's just saying that there will be less employees in 2009 because of the layoffs this year.
ReplyDelete4 observations on the UBS presentation:
ReplyDelete1) No digital representation last year; this year Saridakis gets a prime-time slot.
2) No mention of Classified Ventures. If they're looking for assets to ditch, these might be first to go.
3) DuBow and Saridakis clearly are not on the same page. DuBow touts a hyper-local product as the digital savior while Saridakis realizes scale is the answer to secure more ad dollars.
4) It was referenced that the broadcast Web sites generate $300 million in revenue. That is completely false.
You can dissect Dubow’s words anyway you’d like, but the clearest words he spoke are these; "We are always going to size to the revenue that is there."
ReplyDeleteGiven the double-digit revenue declines forecasted for print in 2009, Gannett’s internal plans to drastically cut pages by year-end, along with other “initiatives” that have already cut content, service, etc. and anyone would be foolish not to believe that more terminations are not coming.
I'm with those who believe Dubow was talking about percentage cuts coming next year, not from current revenues. Giving the collapsing revenues, this makes sense, and community papers rolling up a 20 percent cut in revenues. They are certain to be hit hardest in the next round of layoffs.
ReplyDeleteI also sense Corporate is moving rapidly to a complete transition from print to the Web. The appearance of Saridakis at this conference was a surprise, and shows how Dubow is trying to wow investors with GCI's digital figure. I also suspect those Internet revenue figures are phony, given the industry is moaning about how advertisers have demanded (and got) cut-rate ads for Internet ventures. GCI sites are not pumping out that many ads at discounted prices to justify that revenue estimate.
Jim, I believe that your interpretation regarding future staff reductions is accurate. Afterall, I refer you to Gannett's SEC Form 10-Q filed recently which makes reference to looking forward into 2009. In that document, it's clear that further reductions are to come in 2009. We can only make the asssumption that what Gannett filed with the SEC is accurate.
ReplyDeleteDid I hear it right? GCI is projecting $1.5 billion in operating cash flow in '08? Given market conditions that's an impressive number indeed.
ReplyDelete4:17: This is 2:39. You're right. If the digital revs were as large as they claim, why only break out the size now when they refused to do so as a policy in previous financial reports? And parading Saridakis was a hollow attempt at proving GCI "gets" digital. The fact that the legacy online execs (Jack Williams et al - who have literally done nothing for years) are still employed means Gannett is NOT moving rapidly to complete the digital transition.
ReplyDeleteAnonymous said...
ReplyDelete@12:33 PM Anonymous wrote:
"Does Dubow have an MBA? If he doesn't he should not be where he is. In fact no one at the top should be there unless they have an MBA."
MBAs have done an incredible amount of damage to our economy and financial system with their unbridled mergers and acquisitions, followed by spinoffs and split-ups, along with other harebrained actions.
I say this as someone whose brother taught in an MBA program and who has a couple of other MBAs in the family.
What I got out of this conference was that Corporate is prepared to continue laying off and cutting as long as the revenues continue to decline. They are still declining -- and will continue to decline -- as long as the recession continues. Prominent economists are writing off 2009 as a lost year, so more job losses, consolidations and paper reductions are certainly ahead.
ReplyDeleteMaybe many of us are missing the point. In the past, newspapers could charge higher ad rates because the ads worked. The newspapers were relevant. They mattered in their communities. Problem is, with thinner staffs, the product becomes less relevant. When people fail to read it, the ads stop working. It's just that simple.
ReplyDeleteI met an owner of a car dealership in Columbus last month. He used to spend $2 million a year in the local paper. Now, he doesn't spend anything. He hired three full timers to help manage his web presence, and saved substantially. Same could be said for real estate and jobs advertising.
Matching FTEs to revenue just adds to the downward spiral. Even in a good economy, the ad spend in print just isn't coming back. No one seems to understand that. And if online revs are one ninth of the print with the same CPMs, the model is broken. Gannett, NYT, Tribune, Media News and MNI can't save themselves out of this mess.
I thought the presentation by Saridakis revealed quite a bit. He is clearly looking at the digital opportunity as being much bigger than we are even able to realize sitting in our seats.
ReplyDeleteI listened to his remarks around the need for content and audience and it parallels what we are doing in the newspaper business. He is also looking to grow Gannett's digital business beyond our newspaper footprint. This is quite interesting and so different for Gannett.
I must say he does seem very smart, articulate and quite confident. I am actually glad they had him speaking today as it is a refreshing change to all the other Gannett executives who read prepared remarks.
Whenever I hear my supervisors talk about being platform agnostic, it makes me wonder: Does anyone believe that any of these media platforms really hold the key to saving Gannett?
ReplyDeleteAnonymous wroted:
ReplyDelete"So, they're chopping headcount to mid-teens numbers??"
Yep - that's the goal. 14 person staff per paper. Regionalize and then centralize every facet of the business you can, trim your workforce accordingly, automate everything possible. It's easily doable, and not that far off...