USA Today reorganizing its staff in digital makeover that will result in 130 layoffs

By Michael Liedtke, AP
Thursday, August 26, 2010

USA Today shaking up staff in ‘radical’ overhaul

SAN FRANCISCO — USA Today, the nation’s second largest newspaper, is making the most dramatic overhaul of its staff in its 28-year history as it de-emphasizes its print edition and ramps up its effort to reach more readers and advertisers on mobile devices.

The makeover outlined Thursday will result in about 130 layoffs this fall, USA Today Publisher Dave Hunke told The Associated Press. That translates into a 9 percent reduction in USA Today’s work force of 1,500 employees. Hunke didn’t specify which departments would be hardest hit.

The management shake-up affects both the newspaper’s business operations and newsroom.

Like most newspapers, Gannett Co.’s USA Today has been cutting back in recent years to offset a steep drop in advertising that is depleting its main source of income. To compound the problem, fewer readers are paying for newspapers as free news proliferates on the Web.

Those challenges triggered the most dramatic reorganization since USA Today first hit the streets in 1982 with a then-unique blend of shorter stories surrounded by colorful graphics and pictures.

“This is pretty radical,” Hunke said of the shake-up. “This gets us ready for our next quarter century.”

In the first wave of change, USA Today, which is based in McLean, Va., will no longer have separate managing editors overseeing its News, Sports, Money and Life sections.

The newsroom instead will be broken up into a cluster of “content rings” each headed up by editors who will be appointed later this year. The newly created content group will be overseen by Susan Weiss, who had been managing editor of the Life section. As executive editor of content, Weiss will report to USA Today Editor John Hillkirk.

“We’ll focus less on print … and more on producing content for all platforms (Web, mobile, iPad and other digital formats),” according to a slide show presented Thursday to USA Today’s staff. The AP obtained copy of the presentation.

Given the downhill trajectory of the print newspaper business, a strategy that puts the Web and mobile first makes sense, says Ken Doctor, a media analyst with Outsell Inc.

“The entire organization is set up to put out a daily newspaper and then do this all other stuff,” he said. “That’s not going to work any more.”

In a move that may raise conflict-of-interest questions, Weiss will have a “collaborative relationship” with USA Today’s newly appointed vice president of business development, Rudd Davis, according to one slide.

Davis, the founder of sports website, is being brought in to oversee new business opportunities and brand licensing among other things. BNQT, which focuses on sports such as skateboarding and skiing that appeal to younger audiences, was bought by Gannett in 2007.

Thursday’s slide presentation also said USA Today’s restructuring will “usher in a new way of doing business that aligns sales efforts with the content we produce.”

In separate interviews, both Hunke and Hillkirk said the newspaper won’t allow its need to generate more revenue interfere with its commitment to the First Amendment or investigative journalism.

“Under no circumstances do we ever compromise our integrity,” Hunke said. “But I don’t see any problem with finding out ways to build out strategies that work for advertisers. Frankly, if we do that, we will have a very prosperous future and we are going to stay in the journalism business.”

Tom Rosenstiel, director of the Pew Research Center’s Project for Excellence in Journalism, didn’t see anything in USA Today’s plans that would necessarily compromise the newspaper’s independence.

“Historically there was this notion that there needed to be a firewall between news and business operations,” he said. “That was always more a myth than reality. It was an oversimplification.”

Rosenstiel pointed out that editors at many newspapers have always had responsibility for growing circulation, which in turn is sold to advertisers that want a bigger audience. Now, with newspapers scrambling for a new business model, he said, employees on the editorial side will have to help figure out how to once again align the interests of readers and advertisers in a way that generates enough revenue.

Although USA Today still makes most of its money from its print edition, the reorganization revolves around smart phones and computer tablets such as Apple Inc.’s iPad, which are creating new ways to sell subscriptions and advertising.

“We have to go where the audience is,” Hillkirk said. “If people are hitting the iPad like crazy, or the iPhone or other mobile devices, we’ve got to be there with the content they want, when they want it.”

USA Today’s circulation has been plunging in recent years, dropping to an average of 1.83 million during the six months ending in March. That’s down from 2.3 million in 2007 when USA today reigned as the nation’s largest newspaper. The Wall Street Journal now holds that position with a circulation of 2.09 million.

Besides its circulation, USA Today’s advertising also has been falling. The newspaper sold 580 advertising pages in its most recent quarter ending in June. That’s nearly a 50 percent drop from the 1,098 pages sold at the same time in 2006, before newspaper advertising began its steep slide.

USA Today’s struggles are one reason why Gannett’s stock price has plunged 78 percent in the past four years, going from about $55 at this time in 2006 to Thursday’s closing price of $12.18.

Gannett doesn’t break out USA Today’s finances, but the newspaper is by far the largest of the more than 80 dailies the company owns. Gannett’s stock climbed 33 cents, or 2.7 percent, to close Friday at $12.51.

The mobile push will be overseen by Steve Kurtz, who was appointed vice president of digital distribution. He had been director of digital information technology for

Other new department heads are: Jeff Dionise, vice president of product development and design; and Heather Frank, vice president of vertical development.

USA Today thinks one of its biggest opportunities is sports, which will become “a business unto itself,” Hunke said. The newly created USA Today Sports will be run by Ross Schaufelberger, a former CEO of BNQT Media Group.

The newspapers other content rings will consist of “Your Life,” ”Travel,” ”Breaking News,” ”Investigative,” ”National,” ”Washington/Economy,” ”World,” Environment/Science,” ”Aviation,” ”Personal Finance,” ”Autos,” ”Entertainment” and “Tech.”

AP Business Writer Andrew Vanacore in New York contributed to this report.

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