Media Giant Gannett Prepares for Layoffs Following Disastrous Earnings Report

Major newspaper conglomerate Gannett is facing serious financial problems and is preparing for layoffs and budget cuts. On Wednesday, the company reported $54 million in losses during the second quarter of 2022.

Gannett has announced that it is set to implement a series of measures designed to cut operating costs, including layoffs. The struggling national news chain operates daily newspapers around the country, an industry that has already been decimated in the digital age. In addition to more than 200 regional papers, the company publishes USA Today.

Gannett’s stock price fell almost 30% overnight on Wednesday and has lost more than 57% since the beginning of the year.

Gannett CEO Michael Reed spoke with reporters in a conference call on Thursday, saying the cost-cutting will be “significant and permanent” and will focus “primarily on the print side of our business.”

Reed said the company now does not expect the “near-term pressures to abate in the second half of 2022.” As a result, he said the firm has already begun to move quickly on a cost reduction program.

Many local newspapers operated by the company are already operating with a greatly reduced crew of reporters compared to previous years. Gannett ceased publishing Saturday editions of many of its daily papers earlier this year.

Reed added that the recession and overall economic slowdowns since the COVID-19 pandemic have been felt “most acutely in our legacy print business.” He said that print circulation and advertising have suffered losses even greater than earlier pessimistic projections.

He also cited labor shortages that are affecting home delivery revenues. The number of previous delivery routes that are now unstaffed have gone up by 267% since 2020. Inflationary pressures on American household budgets have also led to far lower home delivery numbers.

Reed said Gannett still has growth priorities that don’t involve local news reporting, including sports, events, gaming, and crossword puzzles.

New Jersey newspaper union representative Jon Schleuss said that Gannett’s executives are “spending millions on all the wrong things.” He said he believes the solution is to “invest in journalists.” Labor representatives have also criticized the company for spending large amounts on stock repurchases and executive compensation.