Gannett, parent company of USA Today, Amarillo Globe News, Lubbock Avalanche Journal, and hundreds of other newspapers across the country, announced that employees would face pay cuts and furloughs as advertising revenue dried up in the wake of the COVID-19 pandemic.
According to The Daily Beast, Gannett CEO Paul Bascobert said in an email sent Monday to staff that employees need to make a "collective sacrifice" to keep the company afloat during the crisis. Pay cuts will begin as soon as this week. The Daily Beast quotes Bascobert as writing.
To avoid layoffs, Gannett employees will be furloughed five days a month through June. Top managers also will feel the pain. Bascobert won't take an annual salary while other Gannett executives will receive a 25 percent pay cut for the duration of the furloughs.
Gannett didn't respond to a request for comment.
Even without the pandemic, Gannett had plenty of challenges the declines in their legacy print businesses show no sign of endings.. The company sold itself last year to private-equity backed New Media Investments, the parent of GateHouse Newspapers, for $1.1 billion. The new company kept the Gannett name and publishes about 30 percent of all U.S. newspapers.
The global pandemic will have a worse impact on advertising spending than the 2008 financial crisis, according to a recently released Internet Advertising Bureau (IAB) survey of 400 ad buyers and other decision-makers.
According to the IAB, a whopping 70 percent of respondents have already "adjusted or paused their planned ad spend," while 16 percent are determining their next move. About a quarter of buyers have paused all their spending for the remainder of the first two quarters, while 46 percent have indicated that they have "adjusted" their ad spending during the same period.