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Indianapolis Star lays off 62 in cost-saving purge

June 21, 2011

The Indianapolis Star on Tuesday laid off 62 employees including more than 15 percent of its newsroom staff in the latest round of cost-cutting by Gannett Co. Inc., the newspaper's parent company.

Among those laid off in Indianapolis were 26 newsroom employees including 12 copy editors and eight reporters, mostly those covering suburban news. The Star also eliminated 19 open positions, said Robert King, the newspaper's religion and philanthropy reporter and president of the Indianapolis Newspaper Guild.

"The Indianapolis Star, I’ve been told repeatedly, continues to make money," King wrote in an e-mail. "Yet Gannett, and its corporate bosses in Virginia, seem to view workers not as assets but as liabilities on a balance sheet."

McLean, Va.-based Gannett, which owns 82 newspapers as well as TV stations, earned $90 million on revenue of $1.25 billion in the first quarter. That compared with a profit of $117 million on $1.3 billion in revenue in the same period a year earlier.

The local layoffs were part of a nationwide purge of about 700 employees in the newspaper chain's U.S. Community Publishing division, a move the company blamed on a sluggish economic recovery. The job cuts amount to 2 percent of Gannett's total work force, according to an internal memo from Bob Dickey, the chain's head of community newspapers.

"National advertising remains soft and with many of our local advertisers reducing their overall budgets, we need to take further steps to align our costs with the current revenue trends," Dickey wrote in the memo. "Each of our local media organizations faces its own market conditions, challenges and opportunities. Therefore, it has been up to each local publisher to determine his or her unique course of action."

Indianapolis Star Publisher Karen Crotchfelt, who took the helm in December, did not return a phone message from IBJ.

The Dickey memo said Gannett would institute furloughs for executives in its community publishing business who earn above an unspecified salary "in an effort to reduce the number of people being let go."

For Gannett, it is the fourth large round of layoffs in three years. In 2009, the company cut 1,400 jobs in its community publishing division.

King, the local guild president, said those let go were "hard-working folks who care about the communities they served." 

The Star's newsroom has 136 employees after the latest round of layoffs, down from 230 in 2007.

"Going forward, we have good people here who will do as they have always done—work harder under more difficult circumstances," King wrote. "But it's hard to imagine how the quality of The Indianapolis Star and indystar.com will remain the same, and how readers will be served by this."

Gannett earned $541 million on $5.4 billion in revenue last year, and CEO Craig Dubow took home salary and benefits worth $9.4 million, double his take in 2009.

Part of Dubow's compensation was a $1.75 million bonus partly tied to achievements in "restructuring costs and creating efficiencies."

Gannett shares rose almost 3 percent Tuesday, to $14.15.

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