Gannett's USA Today requires most of staff to take week-long furlough by June 24, newspaper says it is bracing for tough times in current quarter due to mixed business conditions, volatile advertising environment

Kendall Sinclair

MCLEAN, Virginia , April 5, 2012 (press release) – USA Today is requiring most of its staff to take an unpaid week off to save money, as the nation's second-largest newspaper struggles to sell more advertising.

The furloughs, which were announced Wednesday, are the latest in a series of cost-cutting measures by USA Today since 2008.

USA Today executives said in a memo to the staff that the newspaper is bracing for tough times in the current quarter, which ends in late June.

"The bottom line is that business conditions continue to be mixed and the national advertising environment remains volatile," wrote the executives, Susie Ellwood and Evan Ray. Ellwood is USA Today's executive vice president, and Ray is president of Gannett Publishing Services, a division that prints and distributes USA Today and 81 other U.S. newspapers owned by Gannett.

Most Gannett Publishing Services employees will have to go without pay for a week, too.

Gannett confirmed the furloughs in a statement sent to the AP late Wednesday but did not offer further details.

The furloughs affect all employees at USA Today and USA Weekend except those working in sports, travel, direct sales, according to the memo. The employees must take their furloughs by June 24.

USA Today's website says the newspaper employs 1,425 people.

This is the fourth time in four years that the newspaper's workers have been required to take a week off without pay. USA Today imposed a two-week furlough in 2009 and a one-week furlough in 2010. There were no furloughs last year.

"We know furloughs are difficult for you and your families and our management teams do not take these actions lightly," Ellwood and Ray wrote in the memo. "The furloughs, however, will help us navigate through challenging headwinds and allow us to invest in future growth opportunities."

The latest round of belt-tightening comes a few weeks after USA Today's owner, Gannett Co., committed to return $1.3 billion to its shareholders through dividends and stock buybacks by 2015. Gannett raised the annual dividend on its stock from 32 cents per share to 80 cents per share for 2012.

Gannett's earnings last year dropped 22 percent to $459 million. The company, which is based in McLean, Va., has seen revenue fall for five straight years. Gannett does not break out USA Today's results in its financial reports. The company is scheduled to report its first-quarter results on April 16.

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