In the industry's biggest mass layoff at the time, Gannett began notifying as many as 600 newspaper employees they were losing their jobs on Aug. 18, 2008 -- just as thousands of other newly unemployed newspaper workers flooded an already strained economy. It was the first of many that rocked the company to its core.
The real estate bubble had burst, spawning a global credit crisis that left the U.S. economy in worse shape than any other time since the Great Depression. The board of directors didn't see any way out: "Based on current forecasts," they told shareholders the following March, "2009 is shaping up to be as difficult, if not more so, than 2008."
By 2008's end, GCI had eliminated 7,000 jobs, CEO Craig Dubow told shareholders in his Annual Report letter. The company's annual revenue fell 9% to $6.8 billion. It reported a staggering loss of $6.6 billion after writing down the value of its newspapers.
GCI's stock closed Dec. 31 at $8, crashing 79% from $37.69. The Dow Jones Industrial Average ended the year at 8,776, tumbling a smaller 33% from 13,044. (GCI closed Friday at $24.46, the Dow at 15,081.)
Employees 'our greatest asset'
The board slashed Dubow's annual pay to $3.1 million from $7.6 million in 2007. The rest of the top brass took big hits, too.
In his letter, Dubow -- who retired in 2011 -- said of the layoffs: "These efforts were difficult, even traumatic for our company. Our employees are our greatest asset and the pressure on them this year has been intense."
He continued: "Nevertheless, they have repeatedly and with great loyalty risen to the task and performed what I can only think of as miracle after miracle. As staffs and resources necessarily shrank, our employees continued to do the day-to-day work of putting out daily newspapers, populating websites 24/7 and airing broadcasts. Then they went on to create fabulous new products, apply technology to problems in new and different ways, reach out to their communities and uphold the First Amendment -- still and always our highest calling. Our employees performed the sublime and the mundane. I deeply appreciate them."
The real estate bubble had burst, spawning a global credit crisis that left the U.S. economy in worse shape than any other time since the Great Depression. The board of directors didn't see any way out: "Based on current forecasts," they told shareholders the following March, "2009 is shaping up to be as difficult, if not more so, than 2008."
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| Dubow in 2008 |
GCI's stock closed Dec. 31 at $8, crashing 79% from $37.69. The Dow Jones Industrial Average ended the year at 8,776, tumbling a smaller 33% from 13,044. (GCI closed Friday at $24.46, the Dow at 15,081.)
Employees 'our greatest asset'
The board slashed Dubow's annual pay to $3.1 million from $7.6 million in 2007. The rest of the top brass took big hits, too.
In his letter, Dubow -- who retired in 2011 -- said of the layoffs: "These efforts were difficult, even traumatic for our company. Our employees are our greatest asset and the pressure on them this year has been intense."
He continued: "Nevertheless, they have repeatedly and with great loyalty risen to the task and performed what I can only think of as miracle after miracle. As staffs and resources necessarily shrank, our employees continued to do the day-to-day work of putting out daily newspapers, populating websites 24/7 and airing broadcasts. Then they went on to create fabulous new products, apply technology to problems in new and different ways, reach out to their communities and uphold the First Amendment -- still and always our highest calling. Our employees performed the sublime and the mundane. I deeply appreciate them."
Gannett stock's closing price in 2008 looks all the worse when you consider it closed at a record high of $91 in the second quarter of 2004.
ReplyDeleteBy then, I'd sold all the GCI shares in my 401(k) near that price the previous December, after reading a too-good-to-be-true cover story about the company in Barron's.
"Based on Gannett's prospects," the business weekly said, "this is one of those periods in which the shares look relatively inexpensive . . . and tempting."
Dubow's salary was "cut" to $3.7 m while thousands who made $30,000 to $50,000 were laid off. Why did he need that much? Worst CEO ever.
ReplyDeleteThere's something sadly poignant when Dubow's letter calls upholding the First Amendment "still and always our highest calling."
ReplyDeleteI don't know who wrote this year's letter to shareholders, which was signed by Chairman Marjorie Magner and CEO Gracia Martore. But the words First Amendment don't appear anywhere.
Five years of this baloney.
ReplyDeleteWatching some people leave was easy; others, painful and one that brought tears. The worst thing has been watching what Wall Street has done to the business.
People like to complain about us, but who else is going to keep en eye on officials (elected and otherwise?)
The sad thing is it's also been almost 5 years of Jim's nonsense. The tracking of layoff numbers is a decent endeavor, but it's more than offset by the gutless character assassinations -- always done anonymously and without verifiable facts. There are also the crazy rumors of plant closings and other massive staff changes that never remotely come to pass.
DeleteI would bet that some of the people laid off 5 years ago are still here trying to create dissension in some ill-conceived bid to "hurt the company." To this day, I have no idea what they are trying to accomplish, outside of the common "venting" response. Five years is a long time to vent.
I allow readers to post here anonymously because they'd be disciplined, and possibly fired, if the company knew their true identities.
DeleteIn a perfect world, companies wouldn't do that sort of thing. But this is an imperfect world, and so, too, is this blog.
But I make no apologies for that.
It's wrong to suggest reporting layoffs is this site's only "decent endeavor." Five years ago, I think it's fair to say, too many employees didn't understand the role of the board of directors -- or the names of its members. Many didn't even know the CEO's name. How much top executives got paid, and why, was a mystery. Readers here knew long before the fact that Gracia Martore would be the company's next CEO.
It's reasonable to assume the company would still be mismanaging the company's charitable foundation, including failing to properly disclose that spending to the U.S. Securities and Exchange Commission.
If the board of directors decides to spin off the newspaper division, my readers will be less than surprised because of what they read here.
It's been gratifying to share that information with thousands of employees, current and past, over the past five years.
It's certainly true there's too much sniping and ugly talk here. But smart readers can sift through it and find useful information.
That's one reason why I get, on average, 14,000 unique visitors every month, according to Google Analytics. Sometimes less, sometimes more -- all depending on the ebb and flow of news. For example, during the past 30 days, with much attention focused on layoffs, unique visitors climbed to 35,000.
That's enough people to keep me motivated.
So you're OK with the character assassinations and the silly stories about plant closings? I notice you failed to address that part in your response.
DeleteAgain: "It's certainly true there's too much sniping and ugly talk here. But smart readers can sift through it and find useful information."
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DeleteSo, Jim, if a Gannett paper had some of the garbage that ends up here, would you feel the same way? After all, smart readers would just sift through it.
DeleteJim, there's a big flaw in your philosophy.
DeleteIt's true that some people -- fewer than you believe -- would face consequences for their posts if their names were known.
But you use that as blanket protection for every piece of nonsense that comes from those posters. And they know they will get that protection, so they have no reason to change.
That's dumb and lazy on your part. You've had 5 years to set the tone. You haven't done it.
Thanks for all you do Jim. The people like this guy who can't sort through the sniping and b.s. aren't with worrying about
Delete9:00 writes: "If a Gannett paper had some of the garbage that ends up here, would you feel the same way? After all, smart readers would just sift through it."
DeleteIn fact Gannett websites do have some of the same comments on their websites, and their readers do have to pick and choose what they believe and read.
Also, and even more of an issue, stories and video at Gannett newspapers and TV stations are often weak, full of holes, discrepancies, terrible editing, etc.
Or there's simply no coverage on key subjects, including crime, education, government, health and international affairs. Comments of the kind you're criticizing are far less consequential than a newspaper or station that falls down on their First Amendment responsibilities.
Apparently Jim is the one who can't sort through things.
DeleteIf you seriously think that the attacks you allow here on Gannett and even non-Gannett employees compare at all to those things you listed, then you have limited mental ability. It's either willing ignorance or a serious impairment on your part.
Either way, it's a waste of time hoping for you to figure this out. Like 10:10 said, you've had 5 years to do it, and it still hasn't happened.
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Delete10:47 Thank you. Truth be told, I'll only worry when I stop hearing from these guys.
DeleteFirst lede write thru:
ReplyDeletekeep an eye
I guess it's too early to do my own copy editing.
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ReplyDeleteHe should have been fired instead of disability retirement! He along with the board were in charge of the future and they could not see past lining their own pockets. Truly another American GREED story.
ReplyDeleteI remember the 2008 layoffs at my site. They were just as awful in their lack of connection to staff as would be the following rounds. Who knew.
ReplyDeleteFirst, all we were told on 14 August that that layoffs would occur any time between 14 August and 27 August 2008. The e-mail was out of the blue. Thanks for the "as of today" notice and the ambiguity of which departments would be affected as if the lack of a specific date wasn't enough disregard for the staff's morale.
Next day, 15 August, was a Friday and word came down in the morning that we were going to have a meeting. No time given, just "some time later today." Tension was high. No one had any idea beyond Thursday's sudden and murky e-mail. While a few younger "colleagues" tended to be "on break" far more than the two entitled periods or overstayed their lunches, I rarely if ever took a full 30-minute lunch "hour," let alone breaks, but this was one meeting for which I needed to be available just for nerves alone. Pretty much everyone in my group felt the same, even those few kids who were in the habit of stealing from the company by abusing their breaks and lunch time, and sloughing off their workload to others with an actual work ethic. We all figured nervously, "Well, maybe at least they'll give us more information."
For all that? The meeting never materialized. It wasn't even cancelled. It just never happened. I guess HR and the publisher wanted to leave early, Friday and all. Our weekend was certainly ruined; the execs, not so much.
The following Monday, 18 August, not a peep from management. Same thing on Tuesday, Wednesday... same thing for the rest of the week... each day not knowing anything, and the following weekend ruined just as the previous weekend.
On Monday, 25 August, "staff" was deigned worthy of some contact. It was, of course, in the form of a send-and-forget e-mail. Seven people had lost their jobs, including the site's security team. The site is in a high-crime area. "Staff" was left to deduce who was affected: if we were still here, it wasn't me. It was a mixture of relief that one had escaped membership in the unemployment rolls and disgust with the lack of common communication -- respect! -- which wafted down from the executive suites.
Still, I was naive. I figured it was this site's first experience with layoffs so of course they did it badly. I bet, I thought, if there were to be more -- next year, 2009, I thought -- they would be more humane about it.
And then, at least at my site, the torture started all over again two months later at the end of October 2008. Just an ambiguous e-mail whose only worth seemed to be in confirming that, no, murky e-mails with no specifics is how Gannett rolls. That turned out to be quite the understatement.
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DeleteNot that losing your job is a good thing but at least those laid off in 2008 received severance pay they were told they would receive in the event of a layoff. Those that didn't except a buyout after that or weren't offered one only received supplemental severance pay tied too receiving unemployment payments.
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DeleteThey also got laid off at the worst time in history to find another job in communications. I know people that still haven't lined things up and are still scratching by as contract workers or consultants.
DeleteSeverance pay didn't cut it. They were cast adrift during an economic hurricane. Yet, within weeks, Gannett was hiring again. What still perturbs me is that this company has never offered a systematic problem to help those laid off find other jobs within the company. Seems they didn't want them.
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ReplyDeleteSaddest day ever in my former newsroom, in over a quarter century, was they day the paper was sold to Gannett. Never will forget the expressions on the faces, almost all of whom are no longer there.
ReplyDelete"Nevertheless, they have repeatedly and with great loyalty risen to the task and performed what I can only think of as miracle after miracle." Well what were we supposed to do, Craig? We don't all have a multi-million dollar cushions to fall back on while we figure out or lives. Our children still needed clothing, our stomachs still needed feeding, our rent and mortgages still needed to be paid, Craig. While your back alone got several million dollars, my whole family suffered through that scary time not knowing if we would have enough money to make it through the month. We didn't quit because we couldn't quit. You may as well have said "let them eat cake," Craig. Thanks for nothing you complete prick.
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