As quarterly results loom, handicapping job cuts

On Monday, Gannett reports fourth-quarter sales and profits, amid an improving outlook for the newspaper industry as a whole during the early months of this year. For its approximately 40,000 employees, however, a key question remains: Is the company finished with layoffs and other payroll cuts that have roiled the workforce for well over a year now?

Since August 2008, Gannett has imposed broad layoffs or unpaid furloughs in every quarter except the final three months of last year. Already in the current quarter, employees are on their third furlough, with no final word on whether there'll be another round in the next quarter, which starts at the beginning of April.

What's more, the company has not announced whether it will lift a wage freeze scheduled to end on April 1. Plus, there's uncertainty over the timing of an ongoing consolidation of advertising production at two new centers, in Indianapolis and Des Moines, that could eliminate scores of jobs.

Much of the job picture will be driven by changes in sales, especially of advertising. Early estimates by media stock analysts and competitors predict revenue will continue falling in this quarter and, possibly, throughout the year -- but by much smaller percentages than in the recent past. For example, Wells Fargo securities analyst John Janedis has forecast that ad sales across the industry will drop as much as 9% across 2010.

Yesterday, meanwhile, McClatchy Co. -- which publishes the Miami Herald and the Sacramento Bee -- said it expects ad revenues will fall "in the low- to mid-teens percentage range" in the current quarter. The company has already taken steps to absorb that loss: It laid off employees at the Bee, plus the Kansas City Star and the News & Observer in Raleigh, N.C. CEO Gary Pruitt acknowledged that the company has more cost cutting to do this year as revenue keeps falling. "He didn't say whether that would require more layoffs,'' BusinessWeek says.

Estimating latest Gannett results
For the fourth quarter, Wall Street media stock analysts are forecasting Gannett's overall revenue fell 16% from a year before, to $1.45 billion. They expect earnings will average 63 cents per share, down 26% -- a figure Chief Financial Officer Gracia Martore said the company was "comfortable" with when she spoke to Wall Street analysts in December. In the third quarter, Gannett's overall revenue fell 18% vs. 2008.

Certainly, other publishers are seeing a brighter outlook. Reporting its quarterly results earlier this month, Lee Enterprises, which publishes the St. Louis Post-Dispatch and 48 other mostly small dailies, said "a small but growing number of our enterprises have begun reporting positive year-over-year revenue.'' CEO Mary Junck said ad revenue fell 16% in the last three months of 2009 vs. a year ago. That was a big improvement over the 24% drop in the preceding quarter from 2008.

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[Image: today's Des Moines Register, Newseum. Gannett ad production jobs are being moved to the Iowa city this year]