Monday, March 23, 2009

Breaking: GCI confirms second-quarter furloughs; Dubow: revenue figures continue 'downward slide'

Following is the text of a memo that CEO Craig Dubow just sent to Gannett employees today. A new FAQ explains the furloughs by division.

We are about to begin the second quarter without any real relief in sight from this unprecedented economic downturn and its challenge to our company. Despite all of your truly remarkable efforts to reverse the trend, our revenue numbers continue their downward slide and we have been faced with more difficult decisions.

One of those choices was between more layoffs or another round of furloughs. We chose, for most employees, a furlough program consisting of at least one week of unpaid leave to be taken in April, May or June.

The program will differ from the first quarter’s in a couple of important ways:

The length of the furlough for employees will vary somewhat by division or location, depending on the division’s operating needs and results.

Our higher salaried employees will be asked to make an additional sacrifice. This could be a second furlough week or a week’s furlough plus a temporary salary reduction equivalent to one week’s pay for the quarter, depending on the division and/or location.

Some hourly employees will not be required to take a full week. Each division or location will have different requirements for employees in this category.

Because of the variations, your division head will be the main source of information about your particular program. Memos will be going out shortly to each of you with specific details.

Corporate employees will be participating, as with the first quarter’s program, including all of our company officers and me. Corporate’s memo will come from Gracia.

There will be some exemptions, similar to the first quarter’s program. For instance, some locations that recently have had, or are in the midst of, layoffs or significant salary reductions will be exempt. Represented employees again will be asked to participate in lieu of layoffs.

As with our first program, we are doing furloughs to hopefully mitigate the need for layoffs and to preserve our operations in the face of these extraordinary economic times. We believe this is the best possible course, given the alternatives.

We also need to keep innovating, selling ads and reaching out to audiences to prepare for the return of the economy. When that happens, I believe we will be well prepared to move quickly and take advantage of the new opportunities.

Again, I must thank you all for your hard work, loyalty and dedication. I am truly looking forward to the day I can send an email that congratulates you on getting us through these hard times. That day isn’t here yet, but I believe it will be. So we must continue to do whatever we can to keep Gannett strong and prepare for the future.

Sincerely,

Craig

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

45 comments:

  1. To: USCP employees
    From: Bob Dickey
    Subject: Furloughs


    We continue to battle very difficult economic headwinds causing consumers and advertisers to remain cautious, resulting in further revenue declines. This will require our division to implement a second round of furloughs in the coming months. Furloughs again will be required for all US Community Publishing employees in the second quarter – April, May and June – but we will approach the program differently than in the first quarter.

    Your current pay level will determine the length of your furlough. USCP employees at the operating units earning $90,000 and above will furlough for two weeks during the quarter. USCP employees at corporate headquarters earning $90,000 and above will take one week of unpaid leave and also will have a temporary pay reduction of the equivalent of one week’s pay. That reduction will be spread equally over the three month period. All other USCP employees will be on the same program as last quarter and furlough for one week. Your level of pay is based on your salary or hourly wage. Commissions, bonuses and overtime earnings are not part of the calculation. Your supervisor will provide the specific details.

    Everyone’s participation in the furlough will enable us to minimize the need for additional layoffs during the quarter. The vast majority of our employees fall within the salary ranges that require a furlough of five days during the quarter. We are asking for a larger contribution from some of our employees. I believe these employees will embrace and support this change. We will once again ask employees covered by a bargaining agreement to participate in lieu of layoffs. We are hopeful union leadership will once again support this approach.

    In addition to the furloughs, we will institute a wage and salary freeze effective April 1, 2009 through March 31, 2010.

    I know these measures are especially difficult as everyone juggles busy workloads and a more difficult economy, however they are critical to our company as we manage through this historic downturn.

    Even in the face of these immediate economic challenges, we are aggressively pursuing a variety of projects and programs that will improve efficiency and enhance our sales and marketing efforts in the long term. Our goal for when the economy improves is to strengthen our position as a news and information company that will enable us to invest in our local properties for sustained long-term growth. You will receive more details on these initiatives in the coming weeks.
    I understand the importance of strong local journalism and remain committed to that mission despite the pressure of the current economy. Again, I wish to thank all of you for your hard work and patience. We have managed the current furlough with minimal issues thanks to your commitment and professionalism. With that same spirit we will manage through the second quarter also.

    Please remain open minded to new approaches and share with me any ideas or thoughts you have on improving U.S. Community Publishing. I ask that you continue to keep faith in our industry and support your colleagues as we work through these economic challenges.

    Sincerely,


    Bob Dickey

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  2. Was right. Don't ever doubt me!!!

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  3. Fact sheet
    Gannett furlough program
    Second quarter, 2009

    Q. Why has the company decided to do a second round of furloughs? 
    A. Economic conditions have worsened and are expected to continue to be difficult. Furloughs allow us to preserve operations, be fair to as many employees as possible and still reduce expenses. Plus, furloughs are an alternative to layoffs and may help us reduce the need for layoffs down the line.

    Q. Aren’t there also pay reductions?
    A. Higher salaried employees in each division and corporate will take either an additional week of furlough or a temporary pay reduction equal to a week’s pay spread across the quarter. The number of employees impacted by this differs by division.

    Q.  Is everyone going to participate? 
    A. As with the first round, most employees in all divisions in the U.S. and the corporate staff will participate, depending on a variety of factors. Newsquest is doing a furlough program that is consistent with labor regulations in the UK.

    Q. Will there be any exceptions at all?
    A. Certain employees will be granted exceptions as a group. Also, there will be exceptions for newly hired employees and for other individuals and units who are impacted by other expense reduction measures. Some high volume sales people with significant commissions as part of their compensation may be exempted

    Q. This is a financial hardship for me. Can there be an exception for me?
    A. There will be no individual hardship exceptions. We encourage all employees to make use of resources such as the Employee Assistance Program (See question “What other resources do I have…”).

    Q.  How much money is the company saving by doing this?
    A. A final number is not available at this time. The first quarter furlough program saved approximately $20 million.

    Q. Does this mean there won’t be any layoffs this year?
    A. That decision entirely depends on what happens with revenues during the rest of the year. No final decision has been or will be made at this time. Again, furloughs hopefully will moderate the need for layoffs in the second quarter.

    Q.  Does this mean the company is in really bad shape?  
    A. Gannett continues to be a solid company and we want to stay that way. Instituting furloughs at this time is a sound financial move by a sound company that is facing severe economic conditions. Furloughs are one of a number of steps the company is taking, such as reducing the dividend and consolidating operations, to maintain cash flow and stay strong.

    Q.  I am required to take the unpaid leave. Why can't I take a pay cut instead?
    A. This is a furlough program. There will be temporary pay cuts for some employees. A permanent pay cut program is another way to cut costs, and may be considered at some future date. We don’t want to do different programs for different individuals.

    Q.  Can I give up a week of vacation instead?
    A. No, because vacation days are paid there is no savings to the company.

    Q.  Why are the rules different for hourly and salaried employees?
    A. Hourly employees and salaried employees are subject to different rules set by the U.S. Department of Labor. Basically, salaried employees are paid for a week’s worth of work, not in smaller increments.

    Q. May hourly workers take furlough time in part-day or hourly increments?
    A. We are asking the furloughs be taken in full day units.

    Q. If a salaried employee works while on furlough because of an emergency, can he or she then take a new furlough week later?
    A. Every exempt (salaried) employee will need to complete the furlough as one full payroll week. Furloughs need to be scheduled so back-up personnel are available. If there is an emergency and you need to return to work, a new furlough will be scheduled for a later date. Your supervisor must approve your return to work in advance.

    Q. Does the furlough include part-time workers?
    A. Yes. The furlough should be based on their scheduled or variable time and should be a week’s work of time.

    Q. Can I use part-time people to fill in for furloughed workers?
    A. Not if it expands their hours and costs more.

    Q. Can a salaried employee work on the weekends?
    A. There can be no work done during the payroll week at all so it depends entirely on the operating unit’s payroll week.

    Q. How will my furlough be scheduled?
    A. Furloughs will be scheduled so that normal operations can continue without interruption during the furlough period. You will have an opportunity to discuss your schedule with your supervisor, who ultimately must decide what works best and what you need to do to prepare for your being out.

    Q. Why can’t I do any work while I am out?
    A. There are very specific rules that must be followed. Federal and state laws require that employees, whether hourly or salaried, must not do any kind of work on an unpaid leave. That includes reading or responding to e-mails, calling or responding to calls from colleagues and being on site at your location at any time during your furlough days.

    Q. Who will cover my job while I am out?
    A. You and your supervisor should discuss how your responsibilities will be handled while you are out. If you have a company e-mail address and/or phone extension, you should leave a message directing people to the employee designated to reply in your absence.

    Q. What happens to my benefits while I am out on furlough?
    A. Benefits such as your health and life insurance continue during your furlough. Deductions for your health and optional life insurance coverage will be taken out of your paycheck for any week in which furlough day(s) are taken. You will continue to earn vacation credit during your furlough. If you participate in the Gannett 401(k) Savings Plan, no participant contributions and company-matching contribution will be made for the time you are not paid while on furlough. You are not eligible for a distribution of your pension benefits while you are out on unpaid leave. Garnishments will continue to be taken.

    Q. Am I eligible for state unemployment benefits while I am out on furlough?
    A. Unemployment benefits vary by state. Some states have waiting periods before unemployment benefits commence; others do not. You should contact your local unemployment office for more information.

    Q. What other resources do I have to assist me while I am out on furlough?
    A. Your local Employee Assistance Program can provide counseling or direct you to resources in your community to help you and your family through this difficult period. As a reminder, the Gannett 401k Savings Plan provides you with the ability to borrow from your account, provided you are eligible under the terms of the Plan. More information is on the Plan’s website at www.ybr.com/gannett, or you can call the YBR service center at their toll free number: 866.343.2333.

    Q. I am also taking a temporary pay reduction. Am I required to take time off for this?
    A. No, you are not required to. Time off is a function of your work load and your department’s work load.


    Furloughs and temporary pay cut programs by division

    Across the company: Some locations and groups of employees are exempt, due to other cost cutting efforts. Represented employees will be asked to participate in lieu of layoffs.

    US Community Publishing

    Virtually all employees will take the equivalent of one week of unpaid leave. Hourly employees must take five days over the course of the three-month quarter, scheduled with the approval of their supervisor. Salaried employees must take one full week at one time. In addition, employees who earn over $90,000 will take a second week of unpaid leave.

    Broadcast

    All employees will take at least one week unpaid furlough. Hourly workers can take the five days at any pre-approved time over the three-month quarter. Salaried employees must take the furlough one week at one time. In addition to the furlough week, Broadcast’s management team and department heads at each location will take a temporary pay reduction equivalent to one week’s pay.

    Digital

    All employees will take at least one week unpaid furlough in the quarter. Hourly employees will take the equivalent of one week (five days) over the three-month period, scheduled with the approval of their supervisor. All others will take one week of unpaid furlough plus a temporary pay reduction equivalent to one week’s pay.

    USA TODAY/USA Weekend

    All salaried employees will take one week unpaid furlough. Top 15% of salaried employees will take two weeks of unpaid furlough. Hourly employees can take any five days over the three month period, scheduled with the approval of their supervisor.

    Corporate

    Hourly employees will take three unpaid leave days in the quarter, scheduled with the approval of their supervisor. All other employees will take one week of unpaid furlough. Additionally, vice presidents and above will take a temporary reduction of one week’s pay over the quarter.

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  4. Looks like Digital is paying the biggest price. Why? This is bullshit. If we are "the future", then why are we taking the biggest hit per person???

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  5. My Boss Said:

    You were wrong on everything buth the furloughs. No salary reduction, no layoffs. You're a full-of-shit agitator.

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  6. Is the DIG taking a furlough?

    Gracia...Wake the fuck up as your pet project is bullshit.

    Waste of money for this company. I used to work with those two asses there and I can tell you we can save a lot of money if Gracia was to get a sack and get rid of the DIG.

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  7. "If we are "the future", then why are we taking the biggest hit per person???"

    Because you're not working out as planned. You're lucky to still have jobs, but they're working on that one too.

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  8. My Boss also3/23/2009 12:41 PM

    That you are all fucked when Dickey lays you off end of June fuckers!!!

    5,000 heads are going to roll!!!

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  9. Q. Why can’t I do any work while I am out?

    A: Because we are bending you over and shoving it in dry, you'd be a fucking idiot to work while you are not being paid.

    DuBlow can suck my left nut.

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  10. @12:38 PM

    I have a feeling I know who you are.

    The DIG really doesn't do anything anymore and the whole community thing went down the tubes like a morning #2.

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  11. the best time to find another job is while you still have one...good luck to all my former co-workers, what a disaster.

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  12. The DIG doesn't do shit. Apparently they report into the "Craig and Gracia" two headed clusterfuck CEO's.
    Do you expect Mike Maness and laura Ramos to actually do something?

    They have both been sucking off Gracia and Craig with the same bullshit presentations from IDEO staff.

    I doubt Gracia will admit that the DIG is a waste of money. This is her stupid idea. All I know is they have wasted a lot of time and money!!!

    Why don't they give an update to the company on what our "innovation" guru's are upto?

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  13. Amazing how the newspapers decided to break the news in unison today. Read on:
    Star-Ledger publisher announces employee furloughs, pension changes
    Posted by mdowling March 23, 2009 11:21AM
    In an effort to combat declining revenue, The Star-Ledger will stop contributing to its employee pension plan and require full-time workers to take a 10-day unpaid furlough, the publisher announced today.
    The newspaper will try to cushion the financial blow to its staff by increasing the amount of money it contributes to employees' 401(k) plans while it looks for ways to cut costs and weather the recession, said Star-Ledger publisher George Arwady.
    "The newspaper industry is going through a terrible time," Arwady said. "Our company, like other newspapers around the country, is doing what we need to do to be a viable business for the long term."
    In a meeting with employees this morning, Arwady said there are no plans to sell or close New Jersey's largest newspaper. He also said the paper has no plans to reduce the number of days it prints, move to a totally online news operation or do any of the other extreme measures implemented by other struggling newspapers. Several of those steps were announced today at other newspapers in Michigan.
    The 10-day furlough will affect all 530 full-time employees, including Arwady and the paper's top editors. Another 169 part-time workers will be affected by the changes to the pension plan.
    Arwady said The Star-Ledger was one of the few newspapers in the country that still offered employees both a pension plan and a 401(k).
    Starting May 15, the newspaper will stop contributing to the pension fund. However, current and former employees will still be eligible to receive the pension funds they have accrued up to that point.
    On May 16, the company will begin matching 100 percent of the first 2 percent employees contribute to their 401(k) plans and 50 percent of the next 4 percent employees contribute. Under the current plan, the newspaper matches 50 percent of the first 4 percent of their salary employees put into the plan.
    Last year, The Star-Ledger averted being sold or shutting down when more than 200 employees accepted voluntarily buyouts and the newspaper's unions agreed to concessions to cut costs.
    The Star-Ledger's problems are largely due to a sharp dip in advertising related to the rise of the internet and the recession, the publisher said.
    "The problem facing the Star-Ledger and all newspapers is really not one of readership or the effectiveness of our advertising," Arwady said. "It really has to do with a large and rapid decline of advertising revenue, especially classified revenue-- particularly help wanted."
    The Star-Ledger's current circulation is 282,575 daily and 405,175 on Sunday.

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  14. Looks like Digital is paying the biggest price. Why? This is bullshit. If we are "the future", then why are we taking the biggest hit per person???

    You're not. Only the salaried employees are... and that generally means you're making quite a bit more than us hourly peons. So suck it up.

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  15. Is there no shame or accountability Craig.? Give your bonus back. Same with the rest of you no talent idiots.

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  16. A bonus! A freaking bonus! This guy gets a bonus, and acts like we're all in this together.

    I call B.S.!!!!!!!

    Screw you!

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  17. I was laid off from a Gannett paper in the December round of cuts -- my unemployment check is looking pretty sweet at the moment.

    Also, I like this (in regards to financial hardships): "As a reminder, the Gannett 401k Savings Plan provides you with the ability to borrow from your account." Great... That'll be useful since Gannett 401ks are worth squat. Typical Gannett response.

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  18. Why are so many people acting like they're surprised by this? C'mon folks, there's been no good news in the newspaper industry for going on 10 years now.

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  19. "As a reminder, the Gannett 401k Savings Plan provides you with the ability to borrow from your account."

    Yeah, but what they don't mention is that if you get laid off, the balance you borrowed is due immediately. They pay your loan back from your 401-k funds and then you're taxed with the additional 10% 401-k early withdrawal penalty.

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  20. Sheep no more.

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  21. Pissed. Agitated. Perturbed. Words can't describe it. So, since I'm young, I'll say, "Thanks Gannet. I'm going to get my master's. Thanks for the motivation."

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  22. My Boss also said....

    Give'em HELL! My Boss.

    Just because the layoffs have not happened doesn't mean there not coming.

    Piss on the non-believer's keep us informed.

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  23. "Q. How much money is the company saving by doing this?
    A. A final number is not available at this time. The first quarter furlough program saved approximately $20 million."

    I can think of one person that gets paid about this much... just saying.

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  24. Dickey you prick! Give back your bonus!!

    I am so glad I dont work for this piece of shit company anymore. They did me a favor, and yes my unemployment check also looks pretty good to me right about now!

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  25. Someone forgot to cue the blame-the-employees executive hack that likes to call us "whiners."

    Where are you, oh brave one?

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  26. As much as I know furloughs are better than layoffs, why do I feel that even after bleeding us to death with these furloughs many of us are going to be laid off eventually anyway? And maybe it would be better just to layoff people and be done with it once and for all. No one really seems to be benefiting from this furlough and salary reduction approach. Morale sucks, which in turn hurts productivity and the company. People are under great stress, and therefore are prone to get sick, depressed, etc. Working under a constant dark cloud sometimes seems worse than if GCI just makes the cuts it feels is necessary, and then leave things alone for at least a year and let people get back to normal and let those who are lost start their new lives. This is like a bad marriage that goes on and on because of the kids or financial reasons. No one is happy.

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  27. An interesting twist ... at some newspaper sites in or near metropolitan areas you'll be able to see which managers make more than 90K.

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  28. Does Gannett want to cut waste? Let's start with GMTI.

    I'd also like to know why corporate employees that make over $90K are only required to take 1 week of furlough while everyone else must take 2. Do they think their work is more important that they need to keep their employees around that extra week.

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  29. I don't understand why all these furloughs and other measures are being taken NOW. Why weren't they deployed back in fall, before thousands of jobs were lost at Gannett properties? Can someone please explain that to me?

    So many people lost their jobs at Gannett in December. I just don't understand why Gannett went to the nuclear option first, and is now beginning to fight a ground war. Seems this company got it backwards, and by doing so, lost a ton of good folks back in December. Folks we could have really used right about now.

    Would love to see some discussion on this.

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  30. I suspect there is a low percentage of employees making over $90k in USCP. That's why that number was used. The average salary in Digital is most likely higher than the rest of the company so they did not need to use that number. They just did it for all the salaried employees. Keep in mind Digital is based in DC where the cost of living is pretty high.

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  31. Anon 1:46:

    Totally agree with you. It seems like when revenues started dropping off a couple years ago that Gannett's solution was to throw money at a bunch of problems (e.g. failed web initiatives, etc.) without solving anything...and now they're paying for it. At least that's what it seemed like from where I was sitting (in the newsroom).

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  32. I'm less than two years into my journalism career. And every freaking day, I ask myself why I bothered to spend six years and more than $100,000 getting a bachelor's and a master's degree in something that clearly is never going to pay off. Stupid. Stupid. Stupid. Gannett has succeeded in making me hate working in newspapers, a medium I had always loved and dreamed of being a part of. I think it's about time to cut my losses and get out. I'm now making less money than I did when I started.

    Don't lay me off, Gannett; I quit. Thanks for nothing.

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  33. Somebody needs to get a list of furlough-exempt people and the ages of the people---quickly---for this furlough and the last one. When you get laid off, you just might be glad you got that information.

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  34. Ah, I feel so much better about taking a buyout last month. (Hopefully Gannett is not going to dock ongoing buyouts with furlough provision -- does anybody know?)
    To the person who ranted about Jim being wrong about layoffs -- you are soooo out of line. There will be furloughs -- and (in the near future) more layoffs. Just look at other news companies that imposed furloughs to "stave off layoffs". Nearly all followed with -- guess what -- layoffs!!

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  35. Fine then. We'll just work overtime to cover the people who will be out. If our work does not get done, the company loses money. One ad written off can cost the company far more that they saved via furloughs. Not to mention the cost of an upset customer. And we don't do unpaid OT.

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  36. If you took a buyout, you're not affected by the furlough. Enjoy those checks while they last.

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  37. Hey 12:50 "You're not. Only the salaried employees are... and that generally means you're making quite a bit more than us hourly peons. So suck it up."

    I work in Digital

    I make way less than 90K

    I am being forced to take two weeks w/o pay.

    Why do we make more?

    Look at the cost of living in DC, Northern Va or MD. Once you get done paying rent, mortgage, etc not much left to go around once those big bills are cleaned up for the month.

    Some of us are getting by pay check to pay check

    Fuck you 12:50. You clearly live in a fantasy world if you think we aren't all paying the price. Asshole.

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  39. Digital is getting screwed for all these loser newspaper, broadcast and USA Today dead beats.

    The good news is we can find jobs sooner than these lame asses.

    Good luck "old" media. I am outta here!!!

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  40. How about giving back the 2 million in bonuses the top execs received for '08. It's assinine for them to take money and for us to take a cut when the company is faltering. Is this how you reward poor leadership? Bonuses are usually reserved for good performance. Anybody learn from AIG? I know the amounts are less, but they're still outrageous amounts of which would help the company. Keep this in mind Dubow and the gang will receive yet another bonus at the end of the year. Any bonus is too much considering there are a lot of folks that barely making it. Dubow, you are a greedy bastard!

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  41. I personally am happy, that finally the one's who make over 90K are having to take a bigger cut. I applaud them for that. I still think the salary caps should be at 70k. The only reason Gannett is doing this, because they have to. Otherwise, there would of been more layoffs, and it would of been the workers, not the managers. For some unknown reason Gannett is the only company that is top heavey with middle management. Never understood it. Yes, the furlough sucks, but at least the top people are paying this time. Now maybe they won't be so kool aid drinking in meeting where they condemn others for being honest about what is happening to this company. I say “Ha Ha“ too bad sucker!

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  43. I am very thankful that I was laid off in August with 1000 other lucky ones. It feels like a blessing in disguise now. I feel horrible for the rest of you left behind to endure this God Awful plan (if you could call it a plan) that Gannett has in store for you. Godspeed

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  44. Poor AZ Republic....summer is coming and there will be more economic backsliding. The desert is slow in the summer. Perhaps just furlough the whole summer? Anyway, management please try not to be too disruptive and distracting during these hard times. Stop coming in with new plans everyday. Quit making people feel bad for standing up out of their seats. They are probably asking an important production question to one of their co workers!

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