Wednesday, August 04, 2010
Gannett joins parade of cash-rich companies
After years of cutting jobs and furloughing workers, big companies are now piling up big stashes of cash instead of hiring employees or expanding, a recent USA Today story reported.
Gannett, for example, had about $157 million in cash and cash equivalents in its coffers at the end of June, according to the company's recently filed second-quarter financial report to federal regulators. That was up more than 50% from a year ago, although well down from the $577 million on June 29, 2008, right before the company launched the first of three major layoffs, regulatory filings show.
32 comments:
Jim says: "Proceed with caution; this is a free-for-all comment zone. I try to correct or clarify incorrect information. But I can't catch everything. Please keep your posts focused on Gannett and media-related subjects. Note that I occasionally review comments in advance, to reject inappropriate ones. And I ignore hostile posters, and recommend you do, too."
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They need it to pay Craig.
ReplyDeleteI was one of those Gannett layoff victims. I believe that Gannett cut far more jobs than it needed to, which wasn't uncommon during the height of the recession. Companies wanted to boost stock prices. And let's face it, some employers wanted to get rid of employees they didn't like. So they used the recession as an excuse to clean house, creating one of the worst job markets in our lifetimes.
ReplyDeleteMy lengthy work history with Gannett was good, so my layoff was quite a surprise to put it mildly. They called it a "job elimination." Nothing personal. Yeah, right. It certainly wasn't performance related. And my job responsibilities didn't disappear. But read on. The story gets more infuriating.
Not only is Gannett sitting on a piling of cash and not hiring many people back, but when I went to reapply for the exact position (which was recently posted on job boards) that I once held, I didn't even get a courtesy reply or phone call. I mean it's the exact job they claimed was eliminated when they laid me off well over a year ago. Title is the same, responsibilities are the same. I performed the job quite successfully for many years according to my evaluations. But I guess, in the end, I grew a little too old or just wasn't one of the popular kids. This is a young company that is obviously trying to get younger. It is also a company obsessed with perceptions more than substance.
Not that I needed anymore proof, but this is certainly evidence that the whole "job elimination" thing was pure crap and that the chances of a mid to late-career professional being hired back by Gannett is virtually zilch.
Seems to me that Gannett is continuing its immoral business practices. While these practices have allowed the company to crush various competition and to build the Crystal Palace, I have a suspicion that unethical, mean-spirited hiring/firing practices will eventually catch up with this media giant. Gannett already has one of the worst reputations in the business. Now it has an army of laid off employees revealing unflattering stories about this heartless company and incompetent, insecure managers.
Further proof of what's important to the corporate paymasters. There's a lot of preaching to the choir here, but if any younger job seekers are visiting this blog, please pay heed to these posts. If you want to use the company to make your entry into the media world, fine. Only stay for two or three years, siphon off as much training and experience you can get, then jump to a company that truly cares about its workers and treats them as assets, not liabilities. There are many of them, both in and out of media, and the longer you work for Gannett, the more you will appreciate the improvement in workplace environment, employee morale, mutual respect between workers and management, even perks.
ReplyDeleteA good news item selected by Jim (as usual)and a good and thoughtful post by 9:11 a.m. I share some of his or her opinions. Now let's make some money. Soreheads who'd rather be righteous and outraged than successful should stop reading now.
ReplyDeleteWhen the "market" finally "discovers" the prodigious cash-generating power of GCI, which is diminished but still real and ongoing, and the fact that at the current levels of cash generation and debt paydown the cash machine that GCI is deserves a higher P/E multiple, then you will see a stock price above $20. Maybe WELL ABOVE $20.
If you're an ex or current employee sitting on GCI stock with an average cost well over $20, then that's no great comfort to you. I get it. But anyone who wants to make money the easy way and who has capital to invest should look at GCI at ~$13, where it's trading at the moment.
And if you are a sorehead who's been wronged, look at the whole thing as a way to make the a**h**** pay you back. Because I assure you that Craig and Gracia do not even know that you exist, much less that they're in a fight with you.
9:11, I could have written your post. Older long-time worker whose job was eliminated. The only difference is that when I saw my job posted again, I didn't bother to apply. I should have though, just to make the HR person squirm a little.
ReplyDeleteWhine, whine, whine. Day after day. You got canned because you were not considered valuable by GCI and all you do now is whine, whine whine. What a bunch of sorry losers on this site. Stop whining and posting, day after day, and get off your ass and find some work if you are so ""Talented.'' The majority of people laid off were essentially useless, as we have discovered in retropect. No one misses them, or their bylines. Hell, no one even remembers their names.
ReplyDeleteDon't look back. You had a good job and it was fun in its way, so why not just enjoy the memories of good times, and forget the bad. Otherwise, you will tie yourself up in knots. Gannett is not going to hire back any of those laid off. They would have to pick up on the retirement plan if they did that, and part of this plan is to get rid of employees drawing on that plan so they can eventually scrap the plan.
ReplyDeleteHonest question... How much of this cash is needed in the relatively short term to pay down debt?
ReplyDelete9:11 -- I'm not sure what state you live in, but you may want to consider contacting a lawyer. A layoff is supposed to be temporary and the people layed off are supposed to be the first ones called back in the case of a rehire.
ReplyDeleteIn some states, it would be quite illegal for Gannett to do what you say it has. If you were truly fired without cause and the company then went and hired someone else for a position that you showed an interest in returning to, you may be able to get some compensation.
It would at least be worth talking to an attorney. Just remember. Craig would do it. Gannett has gone out of its way to create a hostile relationship with its employees, it's time the company reaps some of the rewards of that hostility.
Egad! I think I agree with "Whine, whine, whine!" and "Don't look back."
ReplyDeleteThey may be right. How do you fight a corporation that has grown too big, too powerful, is flush with money, has lawyers on the payroll and does pretty much what it wants to do when it wants to do it? Unions aren't much of a force and are treated as a nuisance by Gannett. If you have a legitimate beef you'll have to hire a lawyer yourself and, oh, by-the-way, you're fired! Gannett won't subsidize your lawsuit by employing you.
So, where do you go? What do you do? How did it get this way with American corporations? Could it be that we've been funding our own demise by "investing" our hard earned money in 401K's? Have "we" made, or at least had a hand, in making this monster ourselves?
12:14. . . not sure what you mean when you refer to Gannett's ""retirement'' and the company eventually ""getting rid of it.'' It has a 401K program, but stopped making contributions into pension plan two years ago. Instead of $7,000, $8,000 for instance for an older worker, now you get about $1700 of company stock put into your 401K plan each year. But existing pension plan remain. Please explain what you mean by ""retirement plan?'' Thanks in advance.
ReplyDeleteJim what is the link to the usa today article? Your link does not work Thanks
ReplyDelete2:17 p.m.: Some of this may also boil down to semantics, and Corporate's increasingly careful use of terminology.
ReplyDeleteTo the best of my knowledge, Gannett has issued just two memos announcing company-wide layoffs. In the first memo, from U.S. newspaper division President Bob Dickey in October 2008, the company used the word "layoff" just once.
By last summer, however, his second memo avoided the word altogether. Instead, he used the phrase "job reductions" three times.
2:46 p.m.: I just checked the embedded hyperlink provided, and it worked. However, here's a shortened version of the USAT story's URL, just in case:
ReplyDeletehttp://tinyurl.com/26z6d7u
9:11 AM, 11:41 AM and others who believe this has happened to them...
ReplyDeleteIf Gannett is foolish enough to recreate jobs that you were fired from because those positions were being eliminated, then you should see a lawyer for redress. Companies like Gannett get away with this and other questionable acts not because employees don't have a case, but because employees just want to move on.
By doing so, these employees are unfortunately just leaving money on the table that should have been placed in their pockets.
2:36: How do you fight a corporation? In the Us vs. Them environment this one has created, every day.
ReplyDelete@2:39, I'm pretty sure the company kicked in 5% of an employee's salary each year. Please correct me if I'm wrong.
ReplyDeleteFirst off, let me start by saying a great big HELLO to JIM. Wherever you are in the world, hope you are well! Can't believe you started Gannett Blog again.
ReplyDeleteSecondly, I have not visited Gannett Blog or any other Gannett site until now since I was laid off a year ago today. The curiousity got the best of me and I happened to click on this story.
Granted that I have not read any comments besides the ones posted below this story 'Gannett joins parade of cash-rich companies' I find 12:07 pm's comment absolutely offensive. I was not a longtimer @ Gannett just over 6 years or so but for some it was their whole adult life. For anyone to criticize anyone else and to say they were not considered valuable or essentially useless is someone who doesn't have a clue! If that was the case, in my own case, then all the phone calls I received after I was let go wanting me to explain how to do things to get the work done means that I was in fact valuable and necessary and they never should have let me go in the first place!
We are all PEOPLE some struggling to support their families more so than others. For some, this is their way to vent their frustations @ a company that turned its back on some hardworking people. Cut them some slack. It's not easy out here! I would not wish being laid off in this economy for anything!!!
"Now it has an army of laid off employees revealing unflattering stories about this heartless company and incompetent, insecure managers."
ReplyDeleteYou are dreaming if you think the parade of whining, anonymous posts here is going to change one damn thing.
Jim is the only one here whose name is attached to any of this stuff, and he destroyed his credibility several squares back.
Also, to 9:11: Your post, while touching, falls into the pattern of stating the obvious. You did a good job and were laid off anyway -- we get that. But just rehashing it means nothing. Don't just spout some crap about how Gannett's past "will catch up to it." That's just a waste of time to read. What are you and others doing to change this pattern? If the answer is nothing, then you and others should stop posting here.
If your response to this question is "What are you doing?" and nothing more, then don't even bother answering. That's an indication you should have been fired.
For a company of Gannetts size..... $157 million isn't a whole lot of money. In fact. I find it a little frightening how small the cash reserve is. We've blown through $400 million in two years with massive cutbacks. That should be the real story here.
ReplyDeleteDitto, Anonymous 7:18 AM!
ReplyDeleteIt IS frightening!
2:39 The traditional Gannett pension plan was frozen in 2008, but it still exists. In fact, it is still grossly underfunded because under actuarial projections, there will still be more payouts than money available.
ReplyDeleteConsidering that the company had $1.1 billion in expenses last quarter, I would hardly call having $157 million "cash-rich."
ReplyDeleteLet me know when GCI has 3 years' expenses banked. (About 13 billion or so)
7:18 and 9:14 a.m., you're entitled to your opinions. Differences of opinion are what makes markets, after all. Others may be interested in this statement quoted from Gannett's 10-Q report filed with the SEC 30 July:
ReplyDelete"For the first six months of 2010, the Company's long-term debt was reduced by $432 million, reflecting repayments of borrowings under the revolving credit agreements using cash flow from operations. At the end of the second quarter, the Company's total long term debt was $2.6 billion. The Company's senior leverage ratio was 2.10x as of June 27, 2010, which is substantially below the senior leverage ratio of 3.5x the Company is required to maintain under its revolving credit agreements and term loan agreement."
Translation: "At current rate of payback, we will be debt-free in three years or less."
Reaction by for people who understand how to make money in stocks and see GCI at ~$13: "Ca-ching."
You're welcome.
2:17 there is no law that says there is a priority rehire list for anyone laid off. And by the way we've rehired abotu 10 folks who were laid off. Great folks who are back to work and doing their thing.
ReplyDeleteAnonymous 10:46 A.M. said:
ReplyDelete""Translation: "At current rate of payback, we will be debt-free in three years or less.""
Gotta see it to believe it! The clock is ticking!
10:46 -
ReplyDeleteSince revenues are still declining, where will they find the expense cuts to fund that level of debt repayment going forward?
Cash rich? That wouldn't pay the old pre-2009 dividend for two quarters!
ReplyDeleteFor 12:07 pm and 2:44 am, you've got to be kidding! How utterly foolish to say a majority of people laid-off were useless. Even the most heartless, mindless senior exec at Gannett knows that isn't true. Please share with us your qualifications for determining companywide employee competency. Lie to yourself if it helps you cope but this company has lost some extremely talented people and their absence is apparent in the deteriorating quality of Gannett's print content and on-air broadcasts. When you're focusing on survival by slashing expenses you will always lose employees you wish you could keep. The expense boogey man looms large and all can fall prey to its appetite, even you two. And posting comments at 2:44 am? Take a pill and go to bed. In the future when your Einstein like opinions and sunny disposition won't let you sleep, just say no and move away from your PC. Go kick the dog/cat/gerbil, beat the significant other or your children, mow down a neighbor's roses, you know, all that fun stuff you normally do. Sleep tight while the rest of us try to salvage this company and our livelihoods.
ReplyDeleteDid I just read a post stating the majority of people laid-off were useless!
ReplyDeleteTruth be told, and if that is the truth, then answer me this: How come while all those "laid-off and useless" persons were there working did the company post some of the biggest monetary profit gains in Gannett history? Also, and not to forget - the stock was at an all time high!
Now, I could be wrong but that picture certainly doesn't sound as if those laid-off workers were useless! Okay, fast forward to today and that company's financial situation...... to anyone on the outside looking in, it would appear as if that company laid-off ALL THE WRONG ONES! What I am saying is IF those left behind are the super employees then why aren't they producing far beyond financially what the laid-offs did while they were there working? How come in order to show any type of profit now they have had to lay off more workers and have furloughs?
You can't blame the economy on everything!
.......Hey, I'm just asking!
Good to see Jim is doing his usual fine job of screening out comments that add nothing.
ReplyDelete10:31 p.m. makes a strong case for useless people still holding on to jobs in the company. It's a lot of raving with no good point.
$150 plus million is nothing to brag about. Neither is paying down a debt that shouldn't have existed, and paying it down by cutting costs rather than boosting sustainable revenues.
ReplyDeleteThe issue generating revenues, not having a piggy bank $400 million less than two years ago.
One point about "useless" versus "valuable" employees. That didn't seem to be an issue during the layoffs at The Journal News last year. The issue seemed to be more about shrinking the coverage area to the lucrative advertising regions.
Some excellent producers bailed out rather than put up with the farce of reapplying for so-called "new" jobs for which management would not reveal numbers, locations or pay. It was only after repeated questioning that the publisher finally told the staff that he was not aiming to reduce existing salaries. He and the so-called newsroom leaders lost the little credibility they may have had.
As for investing in Gannett, the market's a gamble no matter what you invest in. There are however, more likely winners than any newspaper publisher. Just don't play with cash you'll need next week.
When looking to invest, do what Warren Buffet does: look at the management of the company. Consider its competence.