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GateHouse’s new round of layoffs fits the sad logic of the coming consolidation » Nieman Journalism Lab

As we speak’s editorial managers find themselves in the lemonade enterprise. Their assembly line of lemons retains gaining velocity, they usually should continuously discover new recipes to make lemonade out of thinner and thinner elements.

On Thursday, GateHouse — a.okay.a. New Media Investments, or NEWM — unleashed a new set of layoffs in its newsrooms. While the firm gained’t supply a selected number, anticipate about 200 GateHouse newsroom staff out as soon as all the termination dust settles; that’s among its 158 every day (and more than 300 weekly) publications coast to coast. This restructuring, one of the largest in current GateHouse historical past, sees layoffs beginning now and continuing over the next couple of months, as the Information Guild finalizes negotiations on layoff terms in the roughly 20 newsrooms it represents.

Layoffs, of course, are not any stranger to the newspaper business. After reaching an apex of 56,900 newsroom positions in 1990, numbers have dwindled, most emphatically after the Great Recession of a decade ago. How many jobs are left? No one knows; there’s no real census anymore, but we will figure something north of 20,000 — in a nation with 70 million more individuals and lots of more issues than in 1990. With this layoff, GateHouse joins Gannett, Tribune, McClatchy, MNG Enterprises (the former Digital First Media), and virtually everybody else in the business in chopping employees. Some do dramatically — as Alden’s MNG did in spring 2018 to nice but short-lasting national alarm. Others do it incrementally. Not often do corporations announce the numbers or speak much about the reasons or strategies concerned in the restructuring.

In this case, we will achieve slightly insight into these cuts — and the lemonade making in progress with the increasing GateHouse chain.

Definitely, these modifications are initially about expense reduction. And in that expense reduction, a serious push to get rid of jobs it sees as “non-content producers.” I requested Bill Church, the company’s senior vice chairman of information, what sorts of job titles those have been on Thursday: “Mid-level editors, assistant city editors, librarians, copy editors, designers, cartoonists.” (A crowdsourced spreadsheet documenting the layoffs principally aligns with that record.)

“We try to focus as much as we can on content creators — reporters, photographers and obviously, trying to hold onto really strong digital talent, which we’ve been able to do fairly routinely in the last couple years so,” he stated.

GateHouse, already at the business’s vanguard shifting editorial design and production from an area to a regional duty, will do extra regionalization. And it will do some hiring along with the cuts: 30 or so journalists brought in to work in investigative/knowledge groups, deployed regionally.

“We’re really excited about that,” Church stated. We’ve received just a little bit of historical past in Florida, and so we’ve expanded both our national knowledge groups, which is predicated in Sarasota, but in addition launching a real Florida investigation workforce. And we’re very quickly going to announce a workforce based mostly in Austin — that’s going to be a regional staff based mostly out of the Statesman to actually take a look at issues across Texas and the West.”

Do the math: 200 jobs gone and, in accordance with GateHouse, about 30 new ones created. On internet, GateHouse will decide up some salary savings, do some restructuring of its business, and intend to do more investigative/enterprise work. As has been typical in the business, there might be fewer layers in the editorial process and extra concentrate on reporting.

“We’ve spent the last couple years really looking at what’s been happening in the industry,” says Church. “Reading everything we can. Any time that we come across a data point, we analyze it and see, you know, where does GateHouse fit? And then also really understanding, you know, what are the changes that are taking place in the industry.”

Out of that work has come has come what it calls the Accelerator Group Mannequin. GateHouse launched it in a message to company leaders on Might 15, and I obtained a replica of the strategy.

The ATM mannequin boasts familiar language to anyone who’s followed newsroom change in the business’s hand-to-mouth period: “Defining audiences. Deciding priorities. Design teams. Deploying plans. Measuring success? Focusing editors on results? Learning from each other.”

GateHouse drew classes from Table Stakes, the Knight Basis-funded newsroom digital modernization packages now in implementation.

“We started looking at Table Stakes and how we could scale it up, really looking at audience behaviors and then understanding that there needed to be a change in how newsrooms lead and also how we’re structured,” Church stated. The program was examined at North Carolina properties final fall and then expanded to a larger group in February. “We added Columbus, New England, Austin, Sarasota, the state of Kansas, Amarillo and Lubbock — so, you know, we had a good mix of both smaller newsrooms and larger newsrooms. The Accelerator Team Model, in many ways, provides a lot more support for our smaller newsrooms but also really leverages the larger newsrooms that GateHouse has acquired in recent years.” (Those greater papers embrace the dailies in Austin, Columbus, Providence. and Palm Seashore.)

Table Stakes is a brilliant program, and the newsroom supervisor graduates of it are clearly better outfitted with digital smarts. However most of their newsrooms are still dropping assets month by month. The strong effort — further funded in a current round of Knight funding — is up towards the harsh reality of endless enterprise decline among all dailies.

Church, properly revered in the commerce, is a realist. “I think anytime that any company has had reductions in the past, you just sort of retool. And we just felt we needed truly a redesign of how our newsrooms operate — so that we can adapt whether you lose one person or several. And you know, part of this is focus as much as you can on the local side, and anything non-local is really up for grabs in terms of consolidation and sharing.”

In fact, that’s not far off from the strategies employed by most of GateHouse’s chain peers — it’s just one other taste.

What do these layoffs mean on the ground, in many of the medium and small papers’ communities? The ache will get each felt and reported on erratically. Simply final week, Angie Muhs, the editor of the GateHouse-owned State Journal-Register in Springfield, Illinois walked out, and that received some consideration.

GateHouse does attempt — in contrast to Alden, for example — to make small investments in some type of a future. Its digital advertising and events enterprise investments are examples.

That’s where these new investigative/knowledge staff allocations come from. NEWM CEO Mike Reed, who laid out his formidable technique to get to income neutral year-over-year at the Lab final yr, acknowledges the direct connection between the actual editorial product that readers get and the attainable survival of the business: “What can we do? We can preserve cash flow for the long-term…We need to do good journalism on less money. We need to produce content that the local market wants.”

Reed is preventing investor fatigue; the marketplace hasn’t a lot favored the strategy. In the first quarter, same-store revenues dropped 7.4 %. NEWM share costs have dropped 45 % over the previous yr, as value buyers and others grew cautious of even a go-go consolidation story in the newspaper business. (The corporate even faced a rare direct shareholder rebuke yesterday, when at its annual assembly, it requested for routine “advisory” approval of the $1.7 million compensation package deal of Kirk Davis, CEO of GateHouse and COO of NEWM. Shareholders as an alternative rejected it by a 3-to-1 ratio.)

To keep the inventory from falling farther, Reed, like different CEOs, figures they should keep earnings. Given double-digit ad declines as far as the eye can see, doing so with out deep expense cuts is unimaginable.

Reduce the EBITDA, it’s straightforward for those outdoors the business to recommend. Take some of the cash you’re making as revenue and use it to take care of present staffing. It’s a simple formulation, however it flies in the face of actuality.

First, whereas shifting from for-profit to nonprofit (as Paul Huntsman is now making an attempt to do with The Salt Lake Tribune) might briefly sluggish newsroom loss, even that sort of move solely delays the losses to return with no real digital transformation.

Second, new entities would nonetheless have to function these nonprofits. A GateHouse, Gannett, or Tribune can’t legally flip themselves into nonprofits; the regulation supplies understandable safety to shareholders. Amid the deepening information decline, who has come forward with the cash and the gumption to do it? Neither Penny Abernathy’s dramatic “News Desert” reporting, the Alden cutthroat motion in Denver, nor The Wall Road Journal’s current miserable graphics-laden take (spoiler alert: all trendlines level southeast) appear to make any difference.

That’s why the logic of consolidation is so inevitable. It’s why Alden pushed exhausting on Gannett, why Gannett and Tribune might finally mate, and why even a Gannett/GateHouse mixture — the risk of which I’ve famous just lately — appears believable. Consolidation means whacking one firm’s massive headquarters value, and that savings buys the surviving CEO time to strategize ahead. With an enormous rollup, we’d, no less than in the brief term, see fewer newsroom layoffs. However that each one depends upon who the roller-upper is — and the way much further advert receipts dive and how rather more digital subscriptions develop.

At the similar time, it’s important to comprehend that even in the rollup enterprise, logic doesn’t necessarily prevail. “It’s already late May,” one newspaper chain CEO just lately advised me. “It makes sense, but nothing may happen until 2020.”

So what can we make of GateHouse’s odd admixture of main layoff and investigative reporting staffing up?

It’s high quality to place your greatest face forward, to color the lemonade-stand in vibrant colors, and that’s what GateHouse is doing here. They’re promising some good lemonade. (It’s also a better face than the one it put forward yesterday, when Reed informed reporters variously that the layoffs have been “not material,” would truly involve the loss of solely “more like 10” jobs, and “I’m sure will be misreported.” A make-up memo from Davis to employees this morning acknowledged “we made sizeable reductions to staff yesterday. This included many newsroom staff.”)

But regardless of how nice the paint job could also be, we will’t help however look behind the stand and see what too typically appears like a newspaper version of a Potemkin village.

Photograph of lemons by ray_explores used underneath a Artistic Commons license.