Gannett gets ready for (more) cost cutting now that GateHouse merger is OK’d

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.

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