Gannett plans layoffs after $53.7M Q2 net loss
The head of the newspaper publishing corporation Gannett is vowing to enact a “significant cost reduction program” after his company posted a net loss of $53.7 million in the second quarter, compared with a net income of $15.1 million the same period one year before.
According to a USA Today report, Gannett”™s adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) totaled $50.9 million in the second quarter, down 56% from the second quarter in 2021, with the declines being attributed to a shrinkage in print revenue and inflationary pressures. Total revenue dropped by 6.9% to $748.7 million in the second quarter, although digital revenue inched up 1.5% year-over-year and accounted for 35% of total revenue.
According to a Poynter report, Maribel Perez Wadsworth, president of Gannett Media, sent a note to the company’s warning of impending layoffs.
“In the coming days,” she wrote, “we will … be making necessary but painful reductions to staffing, eliminating some open positions and roles that will impact valued colleagues.”
Locally, Gannett publishes three daily newspapers: The Journal News, the Poughkeepsie Journal and the Times Herald-Record.
“We are not satisfied with our overall performance in the second quarter,” said Gannett CEO and Chairman Michael Reed, who pointed out the “industry-wide headwinds” in digital advertising and the fraying state of the wider economy.
“Like many companies across many industries, we experienced a very challenging second quarter resulting from the difficult economic environment and rising pressures on the consumer,” Reed said on a company earnings call. “Our weakening consumer demand led to larger-than-expected decline in print subscription revenues, effectively pulling forward expected print revenue losses.”
Reed said cost reductions would primarily focus on Gannett’s legacy print business ”“ print advertising and circulation recorded greater-than-expected losses, while home delivery revenues were impacted by a “67% increase year-over-year in the percentage of unstaffed delivery routes and a 267% increase in unstaffed delivery routes when compared to 2020.”
The company is planning to bring nonstrategic and real estate assets to market in order to repay $150 million to $200 million of debt this year. Still, the company is optimistic about its near-future, with a revised guidance forecasting a net loss of $60 million to $70 million in 2022 ”“ in the first quarter, it projected up to $70 million in net income for the year.
Photo: Michael Reed, CEO and chairman of Gannett