US newspaper publisher Gannett to lay off 700 staff

US newspaper publisher Gannett plans to lay off 700 employees, around 2 per cent of its overall staff.

The cuts will affect the company's US Community Publishing division (USCP), which consists of about 80 daily newspapers.

In a memo circulated to staff yesterday, USCP division president Bob Dickey blamed the cuts on a slower-than-expected economic recovery.

"As we reach the mid-point of the year, the economic recovery is not happening as quickly or favourably as we had hoped and continues to impact our US community media organizations."

Dickey cited a softer national advertising market and reductions in local ad budgets for the decline. He added that, despite improved circulation and audience growth, a weak real estate sector, slow job creation and declines in the car ad market were hampering revenue.

The memo went to say the publisher aimed to "do everything we can to help them and to minimize the impact on our other employees going forward".

USCP division employees were forced to take a week's unpaid leave in January this year. Dickey announced at the time that he would also be taking a week's unpaid leave, and chief executive Craig Dubow and chief operating officer Gracia Martore would take an equivalent salary reduction.

A shareholders report filed by the company in March showed that Dubow was paid $9.4 million (£1.2 million) last year – around twice his 2009 pay – including a £1 million cash bonus.

Martore received £5 million, including a cash bonus of £775,000, also around twice her pay for the previous year.

Gannet owns UK regional newspaper publisher Newsquest, which reported double-digit advertising declines for the first quarter of this year and has faced sustained industrial action recently over proposed redundancies at its local titles across the UK.

Earlier this year staff at Newsquest titles in a number of regions were also asked to take a week’s unpaid leave, which was blamed on "poor trading conditions".

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