It looks like the GateHouse Media and Gannett merger will go through Nov. 19 after shareholders approved the deal — and now industry watchers are waiting for the cost cutting to begin.
- Nieman’s Ken Doctor noted that Gannett started out that the “synergies” made possible from the merger would result in cost savings of $200 million back in July.
- The next month, that number grew to $200 to $300 million in cuts.
- Soon that estimate become $275 to $300 million — with signs indicating the company will seek $400 million or more.
Why it matters: In other words, Gannett is planning to cut somewhere in the neighborhood of half a billion dollars — and a good portion of that will likely come in the form of layoffs.
- Combined, the two companies will employee an estimated 27,600.
- According to Doctor, it’s likely that one in eight will be cut — meaning 3,450 lost jobs.
- Both companies are known for cost cutting strategies that include centralizing back office operations.
- In addition, both companies have a history of cutting local reporters.
- Other operations, such as page design, printing and production of non-local lifestyle coverage are frequently centralized.
- In some markets, Gannett, for example, only has a small handful of people on the ground covering local events — and they’re often expected to write, take photos and produce video content.
- Local newsrooms often have little to no management, with the local reporters taking direction from bosses miles away.
What remains to be seen: While the companies may be able to reduce duplicity in regions where it has operations, which would lead to some immediate options to make cuts, $400 million is still a big number to hit and industry insiders wonder how further cuts will continue to see a decline in local news coverage and quality.