The news giant announced on Tuesday that they’d be splitting their broadcast and digital business from their publishing sector, including in their UK counterpart, Newsquest. But Gannett’s hopeful move has not been seen without criticism, with some expressing dismay at the inevitable job losses.
Gracie Martore, the company’s CEO was optimistically quoted saying of the changes in a statement on Tuesday, “The bold actions we are announcing today are significant next steps in our ongoing initiatives to increase shareholder value by building scale, increasing cash flow, sharpening management focus, and strengthening all of our businesses to compete effectively in today’s increasingly digital landscape,”
The sweeping changes will see a loss of journalism positions at five already named U.S newsrooms: The Tennessean, The Asbury Park Press, The Greenville News, The Pensacola News Journal, and The Asheville Citizen-Times. Employees have been told that they will need to reapply for redesigned positions within the company.
William Fox, managing editor of the Greenville Times, one of five U.S newsrooms making cuts wrote, “Wrenching changes like this don’t come without some pain. There will be fewer management positions and a smaller number of production-related roles.”
But UK and Ireland’s National Union of Journalism (NUJ) has criticised Gannett and is demanding answers from their parent company. “The ownership of Newsquest by Gannett and its US investors over the past 15 years has been an unhappy one for UK staff to say the least. The UK arm has been neglected, starved of investment and hammered over many years by horrendous, compound cuts,” NUJ’s Newsquest group chapel servicing officer, Chris Morley said.
He said that while he welcomed a debt-free publishing firm, he had great concerns about the impact this would have on Newsquest employees, “We are demanding an immediate statement from Newsquest chief executive Henry Faure Walker as to where this deal leaves our members and the UK business for the future.”
Media analyst, Ken Doctor however, is a bit more optimistic about the company’s restructure plans and of their entire acquisition of Cars.com, writing in Nieman Lab that they were necessary and rational moves to make.
“These splits are about financial engineering. As public companies, their primary duty is indeed to maximize shareholder value. Newspaper properties are depressed and distressed, and the public markets have less and less interest in them. So sequestering the print assets to ‘unlock the value’ of broadcast and digital just makes financial sense,” he wrote.
Industry analyst, Jim Goss of Barrington Research in Chicago, sees great potential in these decisions among shareholders and is quoted in Bloomberg as saying, “The main reason any company has done this is to separate out broadcasting, which is becoming a higher-valued asset, from publishing, which, even though it has been stabilizing, clearly has more challenges than the other part of the business,” before adding “There is great value creation and benefit to shareholders.”
Forbes reported that upon the release of Gannett’s plans on Tuesday, shares increased by 0.5%.