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Publishing

UPDATE 1-Gannett plans more furloughs to cut costs-memo

* Gannett furloughs to help avoid layoffs

* Company plans salary freeze for some employees

* No relief in sight from economic downturn, memo says

NEW YORK, March 23 (Reuters) - Gannett Co Inc GCI.N will force employees to take a new round of furloughs in April, May and June to save money as newspaper advertising revenue slides, according to a memo obtained by Reuters.

The furloughs come after a round of one-week unpaid leave for its employees saved the company $20 million, according to a memo from a company executive obtained by Reuters.

“We are about to begin the second quarter without any real relief in sight from this unprecedented economic downturn and its challenge to our company,” Chief Executive Craig Dubow wrote in a memo to employees on Monday.

“Despite all of your truly remarkable efforts to reverse the trend, our revenue numbers continue their downward slide and we have been faced with more difficult decisions,” he wrote.

Gannett was among the first U.S. newspaper publishers to furlough workers to cut costs as ad revenue sinks and people forsake printed papers to get free news on the Internet.

The latest round of furloughs for the publisher of USA Today and dozens of smaller papers throughout U.S. cities and towns will include furloughs that vary by division and location, Dubow’s memo said.

Employees with higher salaries, he said, could face a temporary salary reduction or a second furlough week, he said. A second memo to employees at the community newspaper unit said workers who earn more than $90,000 a year will be subject to some of these variations.

That memo, signed by Bob Dickey, head of the U.S. Community Publishing Division, said Gannett will freeze their wages and salaries effective April 1, 2009, through March 31, 2010.

Gannett’s actions come as the U.S. newspaper industry fights to survive amid the economic recession and a tide of debt that publishers cannot easily repay.

In recent weeks, EW Scripps Co SSP.N has shut down Denver's Rocky Mountain News, while Hearst Corp ended the Seattle Post-Intelligencer's print edition and has threatened to close the San Francisco Chronicle.

Earlier on Monday, Advance Publications told Editor & Publisher magazine that it would furlough workers for 10 days and freeze pensions at most of its papers.

Advance, which along with magazine publisher Conde Nast is part of the Newhouse family’s U.S. media empire, publishes The Star-Ledger in Newark, New Jersey, The Times-Picayune in New Orleans and The Plain Dealer in Cleveland, Ohio.

The company also is ending the print edition of the Ann Arbor News in Michigan, and is cutting back its print circulation at its papers in Flint, Bay City and Saginaw to three days a week.

Gannett shares were up 14 cents, or 6.54 percent, at $2.28, on the New York Stock Exchange in afternoon trading. (Editing by Maureen Bavdek)

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