Wednesday, September 28, 2011

Memo: Government Media orders Q4 furloughs; 'conditions have worsened in the past month'

CEO Elaine Howard sent the following memo to employees at Gannett Government Media Corp. today, according to a reader who forwarded a copy to me this afternoon. The Government Media subsidiary publishes titles including Army Times, Military Times and Federal Times.


GGMC Staff,

The economic news facing our nation and our company is daunting, and market conditions are declining rapidly. We made it through the first half of the year with difficulty, but it seemed then that with belt-tightening and aggressive sales efforts, we would be able to pull through in the latter part of the year. Your efforts to curtail spending since early summer have certainly helped. But unfortunately, economic conditions have worsened in the past month and our own revenue projections have followed that trend.

We find ourselves today in the vortex of three dynamic forces:
  • The ongoing migration of advertising from print to digital
  • Global economic uncertainty affecting consumer manufacturers and suppliers, whose ad dollars are critical to our Military Times products
  • And intensifying deficit reduction efforts which will seriously affect defense spending -- and advertising -- in the years ahead
All this is happening as we enter the fall, the critical months when we traditionally produce most of the company's annual revenue. As a result, we now project missing year-end revenue by 6.5% and profit goals by 24.5%.

Faced with this reality, I have no choice but to implement some very difficult contingency plans. These include:
  • A one-week furlough for all employees in the fourth quarter, which runs from October through December. Under US labor law, non-exempt, or hourly, employees will be able to take furloughs in increments of a single day, but exempt employees will have to take their furloughs all at once. Your manager will work with you on scheduling your furlough and discuss with you how this will work.
  • Further budget cuts for 2012.
Please review the attachments to find answers to some of your questions and to see what steps need to be taken to prepare for your furlough. If you have further questions or need further guidance, please see your manager.

I deeply regret having to make these decisions, which we understand will have a serious impact on your own personal economies. We hope that by making this decision now, you will have more time to plan for this hardship and bear with us, as you have in the past, in this difficult time. I remain bullish on the company's future and assure you I am working hard to identify new sources of revenue to offset these losses.

Related: The referenced attachments are a furlough Q&A, and a nine-page guide to furlough preparation.


  1. And so it begins. Is this a precursor to furloughs company wide in 4th quarter?

  2. A reader tells me this is Government Media's first furlough this year.

  3. Revenue and profit goals. What a bunch of baloney. Missed goals are just that. It's not as if Gannett is suddenly losing money. Its profits are just not what they used to be or what Gannett wants them to be. And what about the fourth element of the "vortex" -- Gannett's need to pump up profits at the expense of its workers to jack up its stock price? That's a constant. Actually it's Gannett's prime directive.

  4. Gannett's actual revenue and profits are and will continue to decline, its only a matter of time, when cutting and furlough will no longer work to help hold up the profit. Critical mass is building and when the scale starts tipping GCI will start posting losses and will not be able to recover.

  5. 10:39: CORRECT.
    They should have sold the company when Knight-Ridder did.

    But we're not talking about the "smartest people in the room" here.

  6. GGMCorp covers the military, federal government and the defense industry. They're not in the red, just not making the obscene profits required to maintain big paychecks for the people who actually make money working there. So who loses out when Elaine and her team can't make their numbers? The little people -- very, very few of whom actually make a living wage for the Washington, D.C., metro area.


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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