Reports: Gannett to Cut More Jobs (Update)

(Update includes revision of layoff projections, photo gallery of media layoffs, and updates of company's stock price.)

A range of anonymous sources both on blogs and in the mainstream press are reporting that Gannett ( GCI), publisher of the USA Today, will announce a slew of layoffs after the July 4 holiday.

Reported figures are as low as 1,000 people and as high as 4,500.

The moves come at a time when the newspaper publishing business has been laid low by the recession -- and a consequent collapse in ad volumes and rates -- and caught by the Internet's inexorable transformation of the news-consuming culture. Print news executives have been scrambling to figure out a way to shift their business models to deal with the latter.
Newspapers in Peril

Like many other publishers, Gannett is also laboring under a heavy debt load ($3.7 billion at last count) even while its cash flow has been severely curtailed. In February, Moody's cut the company's bonds to junk. Violations of debt covenants have become a real possibility.

Thus, Gannett executives have been saying for some time to expect cost-reduction moves of one kind or another -- which almost always, of course, involve layoffs. The McLean, Va., newspaper group, which also owns radio and TV stations, employed 41,500 people as of the end of 2008, after firing some 4,600 people last year. Its profit in the latest quarter fell 60% from the 2008 period, while ad sales declined 34%.

Reflecting the new dour paradigm, Gannett shares have plunged from their all-time highs, reached mid-decade, of more than $90. They were trading Wednesday at $3.67, up 10 cents on the session on light volume.

A former editor at USA Today named Jim Hopkins runs a blog that's dedicated to all things Gannett. For some time he has been posting on his web site, which he says he will soon shut down, redirecting traffic to a new site run by others called Gannettoid.com, that layoffs would be coming at the company in early July. His former job appears to have given him deep contacts at Gannett. According to his source, the company is planning on 4,500 cuts.

But the Wall Street Journal cites a "personal familiar with the company's thinking" who says the people losing their jobs will number between 1,000 and 2,000. Further, the paper says, the cuts will come at the company's chain of 80 small-town daily newspapers, not at the flagship, hotel-room-distributed USA Today.

As originally published this story contained an error. Please see Corrections and Clarifications. Copyright 2009 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

More from Stocks

General Electric Slips as Cowen Suggests Culp Needs to Take Action

General Electric Slips as Cowen Suggests Culp Needs to Take Action

Investors Face Growing Opportunities and Challenges in Cannabis

Investors Face Growing Opportunities and Challenges in Cannabis

J.C. Penney Shares Have Plunged 64% Since Quant Ratings Downgrade

J.C. Penney Shares Have Plunged 64% Since Quant Ratings Downgrade

The 'Fear of Missing Out' Is Missing

The 'Fear of Missing Out' Is Missing

Bye, Bye, Bye Sears: The Week Ahead

Bye, Bye, Bye Sears: The Week Ahead