Dive Brief:
- Gannett will pause 401(K) matching, roll out a mandatory five-day unpaid leave during the 2022 holidays and implement an indefinite hiring freeze, the company confirmed to HR Dive. The news was first reported by the New York Times Oct. 12.
- The company also introduced two voluntary options: an “adjusted workweek” or an unpaid sabbatical. With the former, Gannett encouraged employees to request fewer hours: while they’d face a 20% salary cut, Gannett would still grant them full-time status. The latter could be a one-month or six-month unpaid leave but employees would maintain their health benefits. A voluntary severance package for resigning was also put on the table.
- CEO Mike Reed cited the desire to “sustain local journalism and support small businesses,” as well as “ensure [Gannett’s] balance sheet remains strong.” The announcement came two months after Gannett laid off 400 employees, or 3% of its workforce, USA Today reported (a Gannett paper).
Dive Insight:
Hiring freezes have been on the uptick throughout Q2 and Q3 2022 as a response to the impending economic recession. Economists haven’t officially declared a recession, but most people in the U.S. workforce say they feel it’s imminent.
Changes to financial and talent strategy are to be expected; throughout the pandemic, per Pew Research Center, newspapers and digital media companies are no strangers to layoffs. Knowledge of foreseeable economic behavior, however, does not stop these announcements from being disruptive, anxiety-inducing or painful for workers, as illustrated by the way the announcement and internal Gannett meetings set Twitter ablaze.
Moreover, the company’s approach leaves much to be desired, according to current and former Gannett employees.
In a meeting that lasted less than 15 minutes this afternoon, @Gannett announced mandatory furloughs at the holidays, buyouts, freezing our 401(k) match and stopping hiring. No details. Very little info on timeline.
— Kati Kokal (@katikokal) October 12, 2022
I think most of us are either speechless or swearing rn.
Thank GOD for @azrepublicguild, as Gannett is announcing they are cutting all 401k’s matching, and requiring people to take 5 days off. They’re also offering unpaid leave, a salary reduction with time reduction, and voluntary severance. This is… awful.
— Joseph D. Jaafari (@JosephJaafari) October 12, 2022
Joseph Darius Jaafari, an investigative reporter for the Arizona Republic, expressed his frustrations to HR Dive, even as a member of the Arizona Republic Guild. “We're kind of exempt from a lot of the things that Gannett did — it mainly affects those who aren't unionized, which includes our managers, other desk workers and people who are in other newsrooms,” Darius Jaafari said.
And for those that remain, “it's almost like we have to keep working from scraps of what they're offering.” Pay disparities, for example, affect everyone in the newsroom and in the company, he said. One Arizona Republic Guild report cited a lack of clearly defined roles, pay bands, predictability of performance-based raises and pay increases mindful of cost-of-living as ways in which pay disparities are affecting its journalists.
Another report described a dearth of diversity across Gannett; this included vast pay disparities for women and people of color, as well as a lack of advancement opportunities for these demographics. Additionally, the Arizona guild has noted that turnover in the newsroom has been mostly that of LGBTQ+ talent, journalists with disabilities, women and journalists of color.
“They're not making smarter financial decisions. They're managing this company really poorly and it shows. Unfortunately, they can't right the ship,” Darius Jaafari said.
HR Dive reached out for comment regarding how the economy influenced Gannett’s decision-makers to implement a 401(K) matching moratorium and hiring freeze, among other initiatives. A spokesperson told HR Dive via email, "We've been transparent about the need to take immediate action given the uncertain and challenging economic environment. While difficult, we are confident these decisions will ensure Gannett's future." The company declined to comment further.
The Great Resignation and subsequent studies checking the temperature of labor dissatisfaction continue to prove the importance of sufficient compensation and benefits, along with trust-building. Gannett’s measures provide a notable case study, as some employers attempt different tactics — most notably, labor hoarding.
Will buyouts, hiring freezes and other immediate cost-cutting measures prove the best talent strategy long-term? Or will those who play the long game and focus on retention win out?
Time will tell. At the very least, HR professionals who may soon face similar circumstances can brush up on how to communicate hiring freezes and layoff news with compassion.
