In a separate memo, Gannett chief executive Paul Bascobert told staff on Monday that while subscriptions and audience engagement was up, the company expects revenue to “decline considerably” in the second quarter and that involuntary leave would address the difficulties “head on.”
“Direct sold advertising has already slowed and many businesses have paused their scheduled marketing campaigns,” Bascobert wrote.
Noted Wadsworth: “As businesses close and live events cancel across the globe for the next few months, we are seeing many advertisers and sponsors reducing or even eliminating their marketing spend. With the current pressures and so much uncertainty, it’s difficult to chart our next steps for more than the next few months.”
Advertising is another industry expected to face hard times as the economic woes wrought by the virus settle. A record 3.3 million Americans filed for unemployment last week, a number experts expect to rise this week as job losses hit white-collar workers, collapsing consumer demand. That may well kneecap advertising campaigns as individuals and businesses tighten their belts and hunker down for a painful few months.
Bascobert said he will not take a salary until the furloughs are reversed and that Gannett’s executive team would take a 25 percent pay cut. Wadsworth said the company, which employs just shy of 17,000 people, according to Fortune, hoped this round of cutbacks would avert more involuntary furloughs past the coming quarter.
“By choosing a collective sacrifice,” Bascobert wrote, “we can keep our staff intact, reduce our cost structure, deliver for our readers and clients and be ready to emerge strong and with opportunity to grow when this crisis passes.”
Gannett was purchased by GateHouse Media in November 2019 for $1.1 billion. The merged companies chose to keep the name Gannett, which had endured since 1906 to become one of the largest newspaper publishers in the world.
Shareholders approved that deal only after management promised to find $300 million in annual savings, a massive figure that critics worried put some newsrooms in financial peril. In February, Gannett cut 97 jobs from 27 newspapers in 10 states.