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GANNETT NEWS

Dickey's FAQ on 2010 furloughs


Gannettoid.com | news@gannettoid.com | Posted: Dec. 1, 2009 • Afternoon report


Gannett will institute another round of one-week furloughs in the first quarter of 2010, according to a memo sent Tuesday by Bob Dickey, president of the company's newspaper division.

Dickey and CEO Craig Dubow have ignored recent e-mails from Gannettoid.com attempting to confirm rumors of such an announcement and company spokeswoman Robin Pence had denied furloughs were planned in a Sept. 23 phone call. Pence, who had not commented on the topic again since September, had cited a budget letter sent that month telling publishers not to budget for furloughs.

Gannett first instituted furloughs in the first quarter of 2009, then again in the second quarter before saying it would not have more the rest of the year.

The topic of 2010 furloughs came up when Dickey held a meeting with about a dozen various editors at the company's Content Summit in September. A person familiar with the meeting told Gannettoid.com that Dickey said furloughs were possible for 2010. When pressed at the meeting, Dickey confirmed furloughs were expected. No official had confirmed the rumor until Dickey's announcement.

This round of furloughs is not planned for union employees, but employees at the Detroit Free Press recently approved furloughs.

MEMO | FURLOUGH HELP || DISCUSS THIS IN THE FORUM

Here is the memo:

CONFIDENTIAL

CONTAINS PROPRIETARY BUSINESS INFORMATION - NOT FOR PUBLIC DISSEMINATION

FAQ
Gannett USCP furlough program
First quarter, 2010
December 1, 2009

  1. Q. Why is the company doing furloughs again when the stock price and the economy are getting better?

A. We are seeing some encouraging trends in our business, particularly in advertising where we have seen ad declines slow each quarter of this year. We have also done a great job reducing and managing our debt which helps improve our overall financial picture. While we are encouraged by this, the economy still remains fragile and we think it is important and prudent to take a conservative approach toward managing our businesses. The limited furloughs -- they are not companywide -- will help us maintain our momentum going into the new year.

  1. Q. With all of the consolidations, why do we still have to furlough?

The consolidations and other initiatives were very effective in helping us achieve greater efficiencies across our businesses. The furloughs we took earlier this year saved our company significant dollars, so going forward, we expect this furlough to help us preserve our operations and, most importantly, our staff during the remainder of the recession.

3) Q. Does this mean the company is in trouble?  

A. No. Gannett is in an even stronger position than a year ago and because of everyone’s hard work, we have done a very good job reducing our debt and managing expenses. These efforts have helped us maintain the strength of our company during extraordinarily difficult times. Given the uncertainty of the economy and its continued weak state, we think this is the prudent course to take at this time.

4) Q. Is this furlough compromising our ability to do our jobs or the quality of our

products with an already reduced resource level?

A. We understand that this is challenging. We believe that furloughs provide us the most flexibility within our business units to continue serving our customers while also controlling operating expenses. The first quarter is the lightest quarter so it is the best time to minimize the impact in our business operations. Managers and supervisors will need to manage schedules to ensure that people’s time off are done in a way that does not impact our ability to deliver our products and services.

5) Q. Is everyone in the company participating?

A. No. Our business is stronger than it was this time last year so unlike the furloughs we implemented earlier this year, this will not be a companywide furlough. Corporate and some of our operations have decided to put furloughs in effect based on their specific business conditions.

6) Q. Will there be any exceptions?

A. Certain employees will be granted exceptions as a group. Also, there will be exceptions for newly hired employees and for other individuals and units who are

impacted by other expense reduction measures. Some high volume sales people with significant commissions as part of their compensation may be exempted.

7) Q. This is a financial hardship for me. Can I have an exception?

A. Unfortunately, we cannot make individual exceptions. We recognize that furloughs create hardships and have tried to minimize this by giving hourly employees the flexibility to spread these days over the full quarter. We are also announcing this now so employees have more time to make their plans. We encourage all employees to make use of resources such as the Employee Assistance Program which can help you and your family manage through this difficult time.

8) Q. How much money is the company saving by doing this?

A. Each unit participating has been asked to provide an estimate for the first quarter savings but the final number is not available at this time.

9) Q. Does this mean there won’t be any layoffs this year?

A. We want to avoid future layoffs on a companywide basis and sincerely hope that we can but that decision is dependent on the business climate during the rest of the new year. It is important to note that as we continue to consolidate some operations to achieve greater efficiencies there will be some position eliminations as our normal course of business but that is different than a companywide or division-wide layoff.

10) Q. Will there be another furlough in Q2?

A. Our hope is that future furloughs will not be necessary but business conditions

combined with economic trends will be the major factors as we continue to assess

this market. No decision on this can be made at this time.

11) Q. I am required to take the unpaid leave. Has the company considered pay

cuts instead?

A. Pay cuts, salary freezes and reduced work weeks are other methods of reducing costs that we have considered and may be considered in the future.

12) Q. Does the ability to carry over a week of earned or unused vacation from

2009 to 2010 change now that there will be furloughs in the first quarter of

2010?

A. No, the carryover policy remains in place and allows you to carry over up to one week. This can be used any time in 2010, but you need to schedule it for a time that is mutually agreed upon with your supervisor. With furloughs in the first quarter, you may want to revisit your vacation schedule for 2010 and discuss your plans with your supervisor.

13) Q. Can I give up a week of vacation instead?

A. No, because vacation days are paid there is no savings to the company.

14) Q. Why are the rules different for non-exempt and exempt employees?

A. Non-exempt and exempt employees are subject to different rules set by the U.S. Department of Labor. Basically, exempt employees are paid for a week’s worth of work, not in smaller increments.

15) Q. May hourly workers take furlough time in part-day or hourly increments?

A. We are asking the furloughs be taken in full day units.

16) Q. If a salaried employee works while on furlough because of an emergency,

can he or she then take a new furlough week later?

A. Every exempt (salaried) employee will need to complete the furlough as one full payroll week. Furloughs need to be scheduled so back-up personnel are available. If there is an emergency and you need to return to work, a new furlough will be scheduled for a later date. Your supervisor must approve your return to work in advance.

17) Q. Does the furlough include part-time workers?

A. Yes. The furlough should be based on their scheduled or variable time and should be based on a normal work week.

18) Q. Can I use part-time people to fill in for furloughed workers?

A. Not if it expands their hours and costs more.

19) Q. Can a salaried employee work on the weekends?

A. There can be no work done during the payroll week at all so it depends entirely on the operating unit’s payroll week. A furlough for an exempt employee may vary from site to site but it will always be seven consecutive days and therefore will always include either two weekend days or two of the employee’s regular days off.

20) Q. How will my furlough be scheduled?

A. Furloughs will be scheduled so that normal operations can continue without interruption during the furlough period. You will have an opportunity to discuss your schedule with your supervisor, who ultimately must decide what works best and what you need to do to prepare for your being out.

21) Q. Why can’t I do any work while I am out?

A. There are very specific rules that must be followed. Federal and state laws require that employees, whether hourly or salaried, must not do any kind of work on an unpaid leave. That includes reading or responding to e-mails, calling or responding to calls from colleagues and being on site at your location at any time during your furlough days.

22) Q. Who will cover my job while I am out?

A. You and your supervisor should discuss how your responsibilities will be handled while you are out. If you have a company e-mail address and/or phone extension, you should leave a message directing people to the employee designated to reply in your absence.

23) Q. What happens to my benefits while I am out on furlough?

A. Benefits such as your health and life insurance continue during your furlough. Deductions for your health and optional life insurance coverage will be taken out of your paycheck for any week in which furlough day(s) are taken. Health and life insurance deductions will continue to be based on your rate of pay, not on your reduced pay as a result of the furlough. That means that the amount of your life insurance coverage (equal to one times your annual rate of pay) will not go down as a result of your unpaid furlough time. Similarly, your payroll deduction for medical insurance, which is based on your rate of pay and the salary bracket that you fall into, will remain unchanged since your rate of pay also remains unchanged. You will continue to earn vacation credit during your furlough. If you participate in the Gannett 401(k) Savings Plan, no participant contributions and company-matching contribution will be made for the time you are not paid while on furlough. You are not eligible for a distribution of your pension benefits while you are out on unpaid leave. Garnishments will continue to be taken.

24) Q. Am I eligible for state unemployment benefits while I am out on furlough?

A. Unemployment benefits vary by state. Some states have waiting periods before unemployment benefits commence; others do not. You should contact your local unemployment office for more information.

25) Q. What other resources do I have to assist me while I am out on furlough?
A. Your local Employee Assistance Program can provide counseling or direct you to resources in your community to help you and your family through this difficult period.

As a reminder, the Gannett 401k Savings Plan provides you with the ability to borrow from your account, provided you are eligible under the terms of the Plan. More information is on the Plan’s website at www.ybr.com/gannett, or you can call the YBR service center at their toll free number: 866.343.2333.


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