Friday, December 17, 2010

Furloughs | Here's the latest from 'rumor control'

You'll recall that I heard considerable chatter in October about another round of mandatory one-week furloughs coming during the first quarter -- now, just two weeks away. That speculation died down amid the recent newspaper layoffs, leaving me to conclude any furloughs are on hold.

Not so fast, says an in-the-know reader, in an e-mail with the subject heading, "rumor control." My reader offers the following scenario, which starts with the arrival of this month's P12 financial summaries: "Once they get in the P12 reports," the reader says, "they'll know what the status is and announce the furloughs, meaning the sites will have to scramble to cram all the furloughs into 10 weeks instead of 12. That's what happened the first year."

Another plugged-in reader tells me: "I still hear they are planned. Guess it's possible to move to Q2, but my sources still tell me Q1."

I remain a bit skeptical. It's true Gannett's first-ever round of furloughs, in 2009, was disclosed a full two weeks after that year's quarter started.

But this year's first-quarter furlough was announced a full month before it took effect, in this Dec. 1 memo from Bob Dickey, so everyone would have more time to plan. Corporate already knows overhead's shooting higher in the months ahead, given expected newsprint price increases, so it seems likely the decision has already been made.

Furlough history
In 2009, GCI imposed a one-week, unpaid furlough across all U.S. divisions during the first quarter. Another furlough followed in the second quarter; that one, also for most U.S. divisions, called for one unpaid week for most employees, and a second week for other, highly paid workers.

This year, the U.S. newspaper division, Corporate and some other divisions were furloughed for one week, during the first quarter.

25 comments:

  1. For what it's worth here, I am a Lee employee (and a refugee from Gannett.) We had furloughs in each of the last two years. In both years, we knew by now, because Lee's fiscal year runs ~ Oct. 1 through Sept. 30. We have received no furlough notification this year. We also haven't been told we won't have any, but that would be the way to bet it. Gannett is a different company, of course.

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  2. If you look at the economy and listen to the rumors of better ad sales, I think we should be out of the woods on furloughs. But what I don't know is what some perverse dictate from corporate might bring. I am still gnawed by these reports of another 5000 layoffs coming, and don't see how they can make that number without shutting down some low-performing properties.

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  3. I doubt that increased ad revenue will impact the furlough situation. Gannett may take in more money, but it also has to spend more for newsprint.

    That equates into a need to cut expenses so net profits can be maintained, even if they are at unrealistic levels given the changing landscape.

    There may not be furloughs in the first quarter, but I bet they'll be coming sometime in 2011.

    And layoffs may also be part of the equation, especially if Martore eases into Dubow's office. Hurst's transfer was a signal that Gannett remains in a cutting mood.

    What I'd like to know is if the 5,000 layoffs that have been discussed here are on the horizon.

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  4. 10:37 is right. Newsprint pricing is expected to go up 17% in 2011, and Gannett never waits for the expenses to hit in order to brace for the increased costs.

    Gannett will also force year-over-year comps to be reviewed, and if those periods in 2010 have lower payroll due to furloughs, properties can not submit budgets that have increased expenses.

    In 2011, properties already know that they will have increased expenses in areas out of their control, like newsprint.

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  5. I wish they'd hurry up and make up their minds, I want to plan my furcation soon! I love furcations, the bastards can't call me!

    The lack of paycheck that week sucks, but it's WORTH IT!

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  6. I'll probably post this comment a couple times a week for the next 12 months: There may be layoffs in 2011, but I don't believe they'll be on the scale of 5,000. More likely, any big job cuts will come through attrition. You'll see it as a drip, drip, drip.

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  7. Was it couched in the terms of 5,000 layoffs, or reduced "headcount" by 5,000? If the latter is true, that could include all the bodies that are shed when the design hubs start humming.

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  8. At worst, I believe the original tipster referred to a headcount reduction of 5,000.

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  9. 11:01 is right on the money literally.

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  10. This is the kind of post that kills Jim's credibility. More specifically, how he follows these kinds of posts.

    He has both predicted there will be and there will not be furloughs. Either way, he will be correct, and you can be sure he will tout that success while ignoring the one he was wrong on.

    Just covering all the bases, I guess.

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  11. This is a follow-up to an earlier post, offering new information. In fact, if furloughs are announced, I'll point out that as recently as mid-December, I was skeptical that they would occur.

    What you call "covering all the bases," I call being thorough. Journalists are obligated to tell readers what they know to be true; what they know to be speculative, and what they know to be false.

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  12. Jim: Get someone to leak you the budget-guidance letter that Bob and Co. sent to all publishers and controllers. It spells out that the entire division will need to budget for furloughs in the first quarter and advises that under-performing sites should consider additional measures, such as tiered paycuts, RIFs and additional furloughs beyond the first quarter. Sites were directed to come in at flat or slightly above 2010 NIBT (3qs actual plus 4thQ estimate). That doesn't sound bad until you realize the 17 percent newsprint increase has to be made up, plus health insurance rises and a small raise pool. Many sites are going forward with the 1st Quarter furloughs, then putting the ugly stuff off until the 3rd quarter, hoping Evan can negotiate a newsprint price break for the last half of the year.

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  13. Anyone who's got a copy of this purported budget-guidance letter, you know where to reach me -- confidentially, as always:

    jimhopkins[at]gmail[dot]com

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  14. Great post, 3:32! Jim and his followers simply throw things at the wall to see what will stick. Then they claim they were right.

    Jim, your 3:47 post says you will admit what was false. When do you plan to start?

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  15. We don't normally have a turnover of 5,000 employees a year, although I suspect there's a legion thirsting to get out of here once the economy improves. So if the 5,000 figure holds, it will have to be with some layoffs.

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  16. Turning over decisions about furloughs and other cost-cutting to individual publishers would follow the site-by-site approach Gannett used when it eliminated an estimated 253 newspaper jobs in November, mostly through layoffs.

    Also, one of the readers I quoted in this post tells me this "budget guidance letter is standard stuff," suggesting it may be accurate.

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  17. Yo, Jim, answer the question, bro.

    When do you plan to start admitting what is false here?

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  18. 7:34 Answer: Whenever something is false, of course.

    If I've missed any, please point me to a post or a comment I've made, and I'll review it for accuracy.

    But I need dates. I've published nearly 4,600 posts of my own, and my comments are among the nearly 67,000 overall on this blog.

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  19. I love furlough and if they happen next year I will be loving them even more. Furluoghs happen to be wonderful. Finally, time off. Yes.

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  20. Furloughs are coming - you can count on it. Once a pig starts eating from the trough, it has to keep going back over and over again.

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  21. Isn't there a government restriction regarding furloughs? Something limiting how many can be conducted in a 12-month period?

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  22. Which is it furlough or layoffs so i don't know what's going on?

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  23. 12:27 Based on 12:17's post about Dickey's budget-guidance letter, it may be both, depending on where you work.

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  24. Well Good Luck next year 2011

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  25. Hell, good luck this year. It's not over yet!

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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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