Watch CBSN Live

Gannett Slashes Workforce

When the nation's largest newspaper chain reported huge losses in its Q-2 earnings report last month, everybody knew it was only a matter of time before the other shoe dropped. Sure enough, late yesterday Gannett watchers started blogging a leaked internal memo indicating that 1,000 newspaper jobs, or three percent of its workforce, will be eliminated.
Gannett's profits were down 36 percent in Q-2, an extremely large downturn even in the weak market for the newspaper industry generally. The company's stock fell to a 20-year low, before rebounding somewhat, then shot up over 2 percent today upon word of the impending workforce cuts.

Gannett publishes USA Today, which has suffered a dramatic loss of ad pages over the past year, as well as dailies all across the country. In some ways, the chain is the best single indicator of the financial health of the entire industry.

This patient is not doing very well, and its prognosis remains uncertain.


Meanwhile, the contrast with what is happening at the pyramid of online media couldn't be sharper. Those sharpies over at VentureBeat, a site I love, noticed a very cool transition moment yesterday, as Apple overtook Google in market capitalization. With Apple's stock at $179.30 a share and Google's at $747.24 Apple was worth $158.84 billion to Google's $157.23 billion -- at least for one night.

Today, however, Google traded up sharply, and by closing bell, the search giant was back on top in this fictional race, though just by pocket change -- $90 million or so. None of this really matters, of course, in today's highly volatile economy, but what is notable is that Google has lost roughly a third of its value during the current slowdown, while Apple, with its aggressive product development strategy, is only off around 10 percent.

Still, both companies are easily capable of rising in value during a single trading session (as Google did today) by more than $1.5 billion. No newspaper company can compete with that kind of market power, which is why I mention it in juxtaposition with the news from Gannett,