Projo’s Parent Company Stock Has Dropped 78% in 8 Months — Announces More Cut Backs
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Projo’s Parent Company Stock Has Dropped 78% in 8 Months — Announces More Cut Backs
The company last month announced 400 layoffs and the elimination of 400 vacant positions. On Wednesday, the company announced the suspension of contributions to 401(k), employees to be forced to take five days off in December unpaid, and other significant cuts.
The Gannett stock has fallen from a 52-week high of $6.38 a share to a Wednesday close of $1.40.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTIn a memo to all employees across the 200 daily newspapers, Mike Reed, the CEO of the Virginia-based Gannett, painted a dark picture of the economic condition of the nation's largest newspaper group.
SEC filings revealed that CEO Reed earned $7,741,052 in 2021 – 160 times the median salary of a Gannett worker.
The impact of the announced reductions is unknown in Rhode Island as some employees work under a collective bargaining agreement.
READ THE MEMO BELOW
Team –
These are truly challenging times. The company continues to face headwinds and uncertainty from the deteriorating macroeconomic environment which has led the executive team to take further immediate action.
Before I share the specifics, I want to thank you all for your hard work and commitment. Whether you’re part of the Digital Marketing Solutions team, Gannett Media or USA TODAY Network Ventures, we will navigate this unpredictable climate by working together.
We pledged transparency – and while these actions are tough, I want to be explicit about what we’re doing and why. In order to sustain the mission of our company to empower communities to thrive, sustain local journalism and support small businesses with digital solutions, we need to ensure our balance sheet remains strong.
These are not decisions we made lightly, but they are critical for our long-term success. Here’s what you can expect:
401(k) Match Suspension
Gannett will temporarily suspend the 401(k) match for contributions made on or after October 24, 2022. This decision does not impact employee contributions, just the Company match. Employees may continue their contributions on a pre-tax basis, which reduces taxable income or on an after-tax basis to a Roth 401(k).
December Mandatory Leave
Employees must take 5 days of unpaid leave during the month of December. The mandatory leave will occur over a two-week period from December 19-30 (the holiday observance of Christmas will be paid). Teams will work with their managers to determine scheduling to ensure staffing and coverage as appropriate. HR will provide specific guidance to ensure FLSA compliance.
Voluntary Severance Offer (VSO)*
We are offering to pay severance to an employee in exchange for their voluntary resignation and execution of a separation and release agreement. This program provides flexibility for those who may wish to transition. Employees interested in the VSO must express interest by October 18 and work through November 4, 2022. *In accordance with Gannett’s 2022 severance program.
Hiring Pause
Gannett will cease overall hiring with the exception of key revenue and operating roles as well as positions deemed critical.
Voluntary Options
The following options are also available to employees who wish to reduce their work hours or take an extended break to meet their personal needs.
Adjusted Work Week
Employees may request an adjusted work schedule with fewer hours, commensurate with a 20% reduction in compensation, and maintain full-time employment status. Please note this is not a compressed work week where employees work their normal schedule in fewer days.
Unpaid Sabbatical
Employees may request an unpaid sabbatical from 1 month to 6 months in duration. As an approved personal leave, employees may continue health benefits coverage by paying their portion of premiums directly to Fidelity.
This is a lot to process. This mix of temporary and permanent actions allows us the near-term flexibility we need to drive improvement while preserving our ability to quickly pivot as we see the economy and areas of our business progress.
I recognize that these decisions take a financial and emotional toll but mitigating these economic pressures now will benefit Gannett’s future. The days and weeks ahead will require close partnership with managers and our human resources team to support you as we implement these measures.
Our company is resilient, our people are the best in the industry and my confidence in what we can accomplish as Team Gannett has not wavered. If you missed the Town Hall where I address these actions, you can watch the replay via LINK. You may find additional information at LINK.
My sincere gratitude for all you do,
Mike
Please note that this information may or may not apply to you if you are covered by a collective bargaining agreement, represented by a union or work for an entity that is part of a Joint Operating Agreement.
The National Head of NewsGuild Criticized Reed's Leadership
The battle between Gannett and the media company's unions has been going on for months.
“Gannett’s journalists have lost faith in Mike Reed’s ability to lead the company,” NewsGuild-CWA President Jon Schleuss said in September. “Journalists hold all companies to account and that includes Gannett. We cannot let Wall Street continue to murder local news.”