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Gannett initiates another round of furloughs


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POSTED: Tuesday, March 24, 2009

Gannett Co. is forcing most of its U.S. employees to take another week of unpaid leave this year as the nation's largest newspaper publisher prepares for its rapidly sinking advertising revenue to extend its slide during the second quarter.

The furloughs spelled out yesterday in a company memo must be taken before July and are designed to spread the pain through Gannett without the need for further layoffs.

The McLean, Va.-based company, owner of the Honolulu Advertiser, jettisoned about 4,000 jobs, or about 10 percent of its work force, last year to survive a slump that has seen more than $1.1 billion in annual advertising revenue evaporate since 2006.

The new edict does not affect members of the Hawaii Newspaper Guild, according to Administrative Officer Wayne Cahill. The union approved a new two-year contract agreement last month and such a change would have been subject to collective bargaining, he said. The paper had shed some 150 jobs citing economic conditions.

Advertiser President and Publisher Lee Webber could not be reached.

Gannett started off this year by requiring most of its 41,500 employees, including Chief Executive Craig Dubow, to stay home and give up a week's pay during the first quarter.

Although the newspaper publisher is regarded as one of the most fiscally healthy, it is hardly immune from the economic pressures affecting the entire industry. With its ad revenue still slipping, Gannett appears to be trying to save even more money with a second round of furloughs in April, May and June.

“;We are about to begin the second quarter without any real relief in sight from this unprecedented economic downturn and its challenge to our company,”; Dubow said in a staff memo. “;Despite all of your truly remarkable efforts to reverse the trend, our revenue numbers continue their downward slide and we have been faced with more difficult decisions.”;

The first-quarter furloughs saved Gannett about $20 million. The company declined to estimate how much Gannett it will save from the second-quarter furloughs.

This time around, the owner of USA Today and more than 80 other daily U.S. newspapers is requiring its highest-paid workers to relinquish up to two weeks pay. The extra week applies to a group that includes Dubow, other top executives and newspaper workers making more than $90,000 annually, Gannett spokeswoman Tara Connell said.

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Star-Bulletin reporter Erika Engle contributed to this report.